<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 12, 1998
REGISTRATION NO. 333-51121
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
------------------------
AMENDMENT NO. 4 TO FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
SOFTWARE.NET CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 7375 94-3212136
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
------------------------
3031 TISCH WAY, STE. 900
SAN JOSE, CALIFORNIA 95128
(408) 556-9300
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
WILLIAM S. MCKIERNAN
CHAIRMAN OF THE BOARD
SOFTWARE.NET CORPORATION
3031 TISCH WAY, STE. 900
SAN JOSE, CALIFORNIA 95128
(408) 556-9300
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES OF ALL COMMUNICATIONS, INCLUDING ALL COMMUNICATIONS SENT TO THE
AGENT FOR SERVICE, SHOULD BE SENT TO:
<TABLE>
<S> <C>
RICHARD SCUDELLARI DONALD M. KELLER, JR.
SHANE M. BYRNE GLEN R. VAN LIGTEN
JACKSON TUFTS COLE & BLACK, LLP VENTURE LAW GROUP
60 SOUTH MARKET STREET, 10TH FLOOR A PROFESSIONAL CORPORATION
SAN JOSE, CALIFORNIA 95113 2800 SAND HILL ROAD
(408) 998-1952 MENLO PARK, CALIFORNIA 94025
(650) 854-4488
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: [ ];
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [ ];
If this Form is a post effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ];
If this Form is a post effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ];
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than the
underwriting discount, payable by the registrant in connection with the sale of
the Common Stock being registered hereby. All amounts shown are estimates,
except the Securities and Exchange Commission registration fee, the NASD filing
fee and the Nasdaq National Market listing fee:
<TABLE>
<S> <C>
Securities and Exchange Commission filing fee............... $ 15,340
NASD filing fee............................................. 5,500
Nasdaq National Market listing fee.......................... 1,000
Blue Sky fees and expenses.................................. 5,000
Printing and engraving expenses............................. 150,000
Legal fees and expenses..................................... 250,000
Accounting fees and expenses................................ 200,000
Transfer Agent and Registrar fees........................... 25,000
Miscellaneous............................................... 98,160
--------
Total............................................. $750,000
========
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law (the "DGCL") provides
that a corporation may indemnify directors and officers, as well as other
employees and individuals, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement in connection with specified
actions, suits or proceedings, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation -- a
"derivative action"), if they acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe their conduct was unlawful. A similar standard is
applicable in the case of derivative actions, except that indemnification only
extends to expenses (including attorneys' fees) incurred in connection with the
defense or settlement of such actions, and the statute requires court approval
before there can be any indemnification where the person seeking indemnification
has been found liable to the corporation. The statute provides that it is not
exclusive of other indemnification that may be granted by a corporation's
charter, bylaws, disinterested director vote, stockholder vote, agreement or
otherwise.
Article 6 of the registrant's Bylaws (Exhibit 3.2 hereto) permits
indemnification to the full extent permitted under Delaware law as it now exists
or may hereafter be amended. Subject to any restrictions imposed by Delaware
law, the Bylaws permit an unconditional right to indemnification for all
expense, liability and loss (including attorneys' fees, judgment, fines, ERISA
excise taxes or penalties and amounts paid in settlement) actually and
reasonably incurred or suffered by any person in connection with any actual or
threatened action, suit or proceeding, whether civil, criminal, administrative
or investigative (including, to the extent permitted by law, any derivative
action) by reason of the fact that such person is or was serving as a director
or officer of the registrant or that, being or having been a director or officer
of the registrant, such person is or was serving at the request of the
registrant as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, including service with
respect to an employee benefit plan. The Bylaws also provide that the registrant
may, by action of its Board of Directors, provide indemnification to its
employees and agents with the same scope and effect as the foregoing
indemnification of directors and officers.
II-1
<PAGE> 3
Section 102(b)(7) of the DGCL permits a corporation to provide in its
certificate of incorporation that a director of the corporation shall not be
personally liable to the corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability for (i) any
breach of the director's duty of loyalty to the corporation or its stockholders,
(ii) acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) payments of unlawful dividends or unlawful
stock repurchases or redemptions, or (iv) any transaction from which the
director derived an improper personal benefit.
Article IX of the registrant's Certificate of Incorporation (Exhibit 3.1
hereto) provides that to the full extent that the DGCL, as it now exists or may
hereafter be amended, permits the limitation or elimination of the liability of
directors, a director of the registrant shall not be liable to the registrant or
its stockholders for monetary damages for breach of fiduciary duty as a
director. Any amendment to or repeal of such Article IX shall not adversely
affect any right or protection of a director of the registrant for or with
respect to any acts or omissions of such director occurring prior to such
amendment or repeal.
The registrant has entered into certain indemnification agreements with its
officers and directors, the form of which is attached as Exhibit 10.1 to this
Registration Statement and incorporated herein by reference. The indemnification
agreements provide the registrant's officers and directors with further
indemnification to the maximum extent permitted by the DGCL. Reference is made
to the Underwriting Agreement (Exhibit 1.1 hereto), in which the Underwriters
have agreed to indemnify the officers and directors of the registrant against
certain liabilities.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Since January 1995, the registrant has issued and sold unregistered
securities as follows:
(1) On January 9, 1995, the registrant issued an aggregate of 1,437,500
shares of Series A Preferred Stock which are convertible into 2,875,000 shares
of Common Stock, to ten investors for a consideration of $0.40 per share of
Series A Preferred Stock ($0.33 per share as adjusted for the Spin-off), or an
aggregate of $575,000. The purchasers consisted of one investor that is
presently related to a director who purchased 500,000 shares and nine
unaffiliated investors who purchased 937,500 shares.
(2) On February 27, 1996, the registrant issued an aggregate of 548,020
shares of Series A Preferred Stock which are convertible into 1,096,040 shares
of Common Stock, to three investors for a consideration of $0.91 per share of
Series A Preferred Stock ($0.76 per share as adjusted for the Spin-off), or an
aggregate of $498,697. The purchasers consisted of one investor that is
presently related to a director who purchased 253,131 shares and two
unaffiliated investors who purchased 294,889 shares. Each of the purchasers had
previously purchased Series A Preferred Stock in January, 1995.
(3) On July 24, 1996, the registrant issued an aggregate of 2,037,038
shares of Series B Preferred Stock which are convertible into 4,074,076 shares
of Common Stock, to eleven investors for a consideration of $2.70 per share of
Series B Preferred Stock ($2.25 per share as adjusted for the Spin-off), or an
aggregate of approximately $5,500,000. The purchasers consisted of one investor
that is presently related to a director who purchased 925,926 shares and ten
unaffiliated investors who purchased 1,111,112 shares.
(4) On September 26, 1997, September 30, 1997 and December 5, 1997, the
registrant issued an aggregate of 3,000,000 shares of Series C Preferred Stock
which are convertible into 3,000,000 shares of Common Stock, to 19 investors for
a consideration of $2.04 per share of Series C Preferred Stock ($1.70 per share
as adjusted for the Spin-off), or an aggregate of approximately $6,120,000. The
purchasers consisted of eleven investors that are presently related to certain
directors who purchased 2,677,450 shares and eight unaffiliated investors who
purchased 322,550 shares.
II-2
<PAGE> 4
(5) On March 18, 1998, and April 3, 1998, the registrant issued an
aggregate of 1,153,846 shares of Series D Preferred Stock which are convertible
into 1,153,846 shares of Common Stock to eleven investors for a consideration of
$2.60 per share, or an aggregate of approximately $3,000,000. The purchasers
consisted of ten investors that are presently related to certain directors who
purchased 1,145,264 shares and one unaffiliated investor who purchased 8,582
shares.
(6) In March 1998, the Company entered in an agreement with AOL pursuant to
which, subject to certain limited exception, AOL agreed to buy shares of the
Company's Common Stock at a price per share equal to the initial public offering
price (less Underwriters' discount) for an aggregate purchase price of
$2,000,000. Based on an initial public offering price of $8.00 per share, AOL
will purchase 268,817 shares of Common Stock immediately prior to the
consummation of this offering. Concurrent with the purchase of the shares of
Common Stock by AOL, the Company will issue to AOL a Warrant for an amount of
Common Stock equal to 1.5 times the number of shares purchased by AOL in the
aforementioned investment at a per share exercise price equal to the initial
public offering price (less Underwriters' discount) which will vest in
increments of 1/36th per month commencing March 1, 1998. Based on an offering
price of $8.00 per share and an underwriting discount of $0.56 per share, the
Company will issue to AOL a Warrant for 403,225 shares of Common Stock
immediately prior to the consummation of this offering.
(7) In March 1998, the registrant also issued to AOL a Warrant to purchase
369,578 shares of the registrant's Series D Preferred Stock at a price of $2.60
per share vesting in increments of 1/36th per month commencing March 1, 1998;
provided, however, that the Warrant is not exercisable until after August 31,
1999, except in the event of a change of control (as defined therein). This
Warrant will terminate in accordance with its terms immediately prior to the
consummation of this offering.
Each of the foregoing purchases and sales were exempt from registration
under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to
Section 4(2) thereof on the basis that the transactions did not involve public
offerings.
(8) From January 5, 1995 through the date of June 1, 1998, the registrant
granted stock options to purchase 4,631,800 shares of Common Stock, with
exercise prices ranging from $0.0042 to $7.00 per share, to employees,
consultants, and directors pursuant to its 1995 and 1998 Stock Option Plans. Of
these options, options for 812,745 have been canceled without being exercised,
options for 108,542 shares have been exercised and options for 3,710,513 shares
remain outstanding. From January 5, 1995 through the date of the Prospectus, the
registrant also granted stock options outside of any plan to purchase 1,000,000
shares of the registrant's Common Stock, with an exercise price of $0.004 per
share. Of these options, none have been canceled, none have been exercised and
1,000,000 remain outstanding.
The sales and issuances of these securities were exempt from registration
under the Securities Act pursuant to either Rule 701 promulgated thereunder on
the basis that these options were offered and sold either pursuant to a written
compensatory benefit plan or pursuant to a written contract relating to
consideration, as provided by Rule 701, or pursuant to Section 4(2) thereof on
the basis that the transactions did not involve a public offering.
II-3
<PAGE> 5
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S> <C>
**1.1 -- Form of Underwriting Agreement.
**2.1 -- Form of Agreement and Plan of Merger between the Registrant
and software.net Corporation, a California corporation.
**3.1 -- Form of Certificate of Incorporation of the Registrant.
**3.2 -- Form of Bylaws of the Registrant.
*4.1 -- Specimen of Certificate for Common Stock.
**5.1 -- Opinion of Jackson Tufts Cole & Black, LLP.
**9.1 -- Shareholders Agreement dated March 18, 1998, by and between
the Registrant and each of the holders of the Registrant's
Series C and Series D Preferred Stock.
**10.1 -- Form of Indemnification Agreement.
**10.2 -- 1995 Stock Option Plan, as amended.
**10.3 -- 1998 Stock Option Plan.
**10.4 -- Stock Option Agreement dated as of March 31, 1995, by and
between the Registrant and John Pettitt.
**10.5 -- Series A Preferred Stock Purchase Agreement, as amended.
**10.6 -- Series B Preferred Stock Purchase Agreement.
**10.7 -- Series C Preferred Stock Purchase Agreement.
**10.8 -- Series D Preferred Stock Purchase Agreement.
**10.9 -- Common Stock and Warrants Subscription Agreement dated as of
March 18, 1998, by and between the Registrant and America
Online, Inc.
**10.10 -- Conveyance Agreement dated as of December 31, 1997, by and
between the Registrant and Internet Commerce Services
Corporation (now known as CyberSource Corporation).
+10.11 -- Interactive Marketing Agreement dated as of March 1, 1998,
by and between the Registrant and America Online, Inc.
**+10.12 -- Sponsorship Agreement dated as of March 30, 1998, by and
between the Registrant and Excite, Inc.
**+10.13 -- Co-Marketing Services Agreement dated as of June 23, 1997,
by and between the Registrant and Netscape Communications
Corporation.
**10.14 -- Trademark License Agreement dated as of June 23, 1997, by
and between the Registrant and Netscape Communications
Corporation.
+10.15 -- Government Integrator Agreement (#3622) dated as of May 5,
1995, by and between the Registrant and Microsoft
Corporation.
**10.16 Offer letter to Mark Breier.
**10.17 Credit Agreement dated as of May 21, 1998 among the
Registrant, Deutsche Bank AG, New York Branch, as Agent and
the other financial institutions party hereto.
**10.18 -- Agreement dated as of July 3, 1996, by and between the
Registrant and the United States Department of Defense,
Defense Mapping Agency
(#N00140-96-C-2410).
**10.19 -- Agreement dated as of June 12, 1997, by and between the
Registrant and the United States Department of Defense,
Defense Logistics Agency
(#N00140-97-D-1756).
+10.20 -- Inter-Company Cross License Agreement dated as of April 23,
1998, by and between the Registrant and Internet Commerce
Services (now known as CyberSource Corporation), as amended
on May 19, 1998.
**10.21 -- Promissory Note dated as of April 15, 1998, by and between
the Registrant and William S. McKiernan.
**10.22 -- Pledge Agreement as of April 15, 1998, by and between the
Registrant and William S. McKiernan.
**10.23 -- Internet Services and Products Agreement dated as of April
29, 1996, by and between the Registrant and Exodus
Communications, Inc.
</TABLE>
II-4
<PAGE> 6
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S> <C>
+10.24 -- Internet Commerce Services Agreement dated as of April 23,
1998, by and between the Registrant and CyberSource
Corporation, as amended on May 19, 1998.
**10.25 -- Office Building Lease dated as of July 8, 1997, as amended,
by and between the Registrant and PGP-South Bay Office
Towers, Inc.
**10.26 Agreement dated as of December 19, 1995, by and between the
Registrant and the United States Department of Defense, DFAS
(#N00140-96-G-D115).
**10.27 Call Center Agreement dated as of October 17, 1997, by and
between the Registrant and LOGISTIX.
**10.28 -- Sublease dated as of May 27, 1998 by and between the
Registrant and First Data Merchant Services Corporation.
**23.1 -- Consent of Ernst & Young LLP, Independent Auditors.
23.2 -- Consent of Jackson Tufts Cole & Black, LLP (included in
Exhibit 5.1).
**24.1 -- Power(s) of Attorney (see page II-7).
**27.1 -- Financial Data Schedule.
</TABLE>
- ---------------
* To be filed by amendment.
** Previously filed.
+ Confidential Treatment Requested.
(b) Financial Statement Schedules
II. VALUATION AND QUALIFYING ACCOUNTS
SOFTWARE.NET CORPORATION
VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)
<TABLE>
<CAPTION>
BALANCE AT CHARGED TO BALANCE AT
BEGINNING COSTS AND DEDUCTION/ END OF
DESCRIPTION OF PERIOD EXPENSES WRITEOFF PERIOD
----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Year ended December 31, 1995
Accounts receivable allowances................. $ -- $ -- $ -- $ --
Year ended December 31, 1996
Accounts receivable allowances................. $ -- $ 77 $(12) $ 65
Year ended December 31, 1997
Accounts receivable allowances................. $ 65 $240 $(30) $275
</TABLE>
All schedules omitted are inapplicable or the requested information is
shown in the financial statements of the registrant or related notes thereto.
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 14, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-5
<PAGE> 7
The undersigned Registrant hereby undertakes to provide to the
Underwriters, at the closing specified in the underwriting agreement,
certificates in such denominations and registered in such names as required by
the Underwriters to permit prompt delivery to each purchaser.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-6
<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Second Amendment to Registration Statement to be signed on
its behalf by the undersigned, hereunto duly authorized in San Jose, California,
on June 12, 1998.
software.net Corporation
By: /s/ WILLIAM S. MCKIERNAN
------------------------------------
William S. McKiernan
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this Second
Amendment to Registration Statement has been signed by the following persons in
the capacities indicated on the 12th day of June, 1998.
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<S> <C> <C>
Principal Executive Officer:
By: /s/ WILLIAM S. MCKIERNAN* Chairman of the Board June 12, 1998
-------------------------------------------------
William S. McKiernan
Principal Financial Officer and Principal Accounting Officer:
By: /s/ MICHAEL J. PRAISNER Vice President, Finance & June 12, 1998
------------------------------------------------- Administration and Chief
Michael J. Praisner Financial Officer
Additional Directors:
By: /s/ MARK L. BREIER* President, Chief Executive June 12, 1998
------------------------------------------------- Officer and Director
Mark L. Breier
By: /s/ LINDA FAYNE LEVINSON* Director June 12, 1998
-------------------------------------------------
Linda Fayne Levinson
By: /s/ HUBERT E. KOLDE* Director June 12, 1998
-------------------------------------------------
Hubert E. Kolde
By: /s/ STEVEN P. NOVAK* Director June 12, 1998
-------------------------------------------------
Steven P. Novak
By: /s/ RICHARD SCUDELLARI* Director June 12, 1998
-------------------------------------------------
Richard Scudellari
By: /s/ MICHAEL J. PRAISNER
-------------------------------------------------
Michael J. Praiser
Attorney-in-Fact
</TABLE>
II-7
<PAGE> 9
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S> <C>
**1.1 -- Form of Underwriting Agreement.
**2.1 -- Form of Agreement and Plan of Merger between the Registrant
and software.net Corporation, a California corporation.
**3.1 -- Form of Certificate of Incorporation of the Registrant.
**3.2 -- Form of Bylaws of the Registrant.
*4.1 -- Specimen of Certificate for Common Stock.
**5.1 -- Opinion of Jackson Tufts Cole & Black, LLP.
**9.1 -- Shareholders Agreement dated March 18, 1998, by and between
the Registrant and each of the holders of the Registrant's
Series C and Series D Preferred Stock.
**10.1 -- Form of Indemnification Agreement.
**10.2 -- 1995 Stock Option Plan, as amended.
**10.3 -- 1998 Stock Option Plan.
**10.4 -- Stock Option Agreement dated as of March 31, 1995, by and
between the Registrant and John Pettitt.
**10.5 -- Series A Preferred Stock Purchase Agreement, as amended.
**10.6 -- Series B Preferred Stock Purchase Agreement.
**10.7 -- Series C Preferred Stock Purchase Agreement.
**10.8 -- Series D Preferred Stock Purchase Agreement.
**10.9 -- Common Stock and Warrants Subscription Agreement dated as of
March 18, 1998, by and between the Registrant and America
Online, Inc.
**10.10 -- Conveyance Agreement dated as of December 31, 1997, by and
between the Registrant and Internet Commerce Services
Corporation (now known as CyberSource Corporation).
+10.11 -- Interactive Marketing Agreement dated as of March 1, 1998,
by and between the Registrant and America Online, Inc.
**+10.12 -- Sponsorship Agreement dated as of March 30, 1998, by and
between the Registrant and Excite, Inc.
**+10.13 -- Co-Marketing Services Agreement dated as of June 23, 1997,
by and between the Registrant and Netscape Communications
Corporation.
**10.14 -- Trademark License Agreement dated as of June 23, 1997, by
and between the Registrant and Netscape Communications
Corporation.
+10.15 -- Government Integrator Agreement (#3622) dated as of May 5,
1995, by and between the Registrant and Microsoft
Corporation.
**10.16 Offer letter to Mark Breier.
**10.17 Credit Agreement dated as of May 21, 1998 among the
Registrant, Deutsche Bank AG, New York Branch, as Agent and
the other financial institutions party hereto.
**10.18 -- Agreement dated as of July 3, 1996, by and between the
Registrant and the United States Department of Defense,
Defense Mapping Agency
(#N00140-96-C-2410).
**10.19 -- Agreement dated as of June 12, 1997, by and between the
Registrant and the United States Department of Defense,
Defense Logistics Agency
(#N00140-97-D-1756).
+10.20 -- Inter-Company Cross License Agreement dated as of April 23,
1998, by and between the Registrant and Internet Commerce
Services (now known as CyberSource Corporation), as amended
on May 19, 1998.
**10.21 -- Promissory Note dated as of April 15, 1998, by and between
the Registrant and William S. McKiernan.
**10.22 -- Pledge Agreement as of April 15, 1998, by and between the
Registrant and William S. McKiernan.
**10.23 -- Internet Services and Products Agreement dated as of April
29, 1996, by and between the Registrant and Exodus
Communications, Inc.
</TABLE>
<PAGE> 10
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S> <C>
+10.24 -- Internet Commerce Services Agreement dated as of April 23,
1998, by and between the Registrant and CyberSource
Corporation, as amended on May 19, 1998.
**10.25 -- Office Building Lease dated as of July 8, 1997, as amended,
by and between the Registrant and PGP-South Bay Office
Towers, Inc.
**10.26 Agreement dated as of December 19, 1995, by and between the
Registrant and the United States Department of Defense, DFAS
(#N00140-96-G-D115).
**10.27 Call Center Agreement dated as of October 17, 1997, by and
between the Registrant and LOGISTIX.
**10.28 -- Sublease dated as of May 27, 1998 by and between the
Registrant and First Data Merchant Services Corporation.
**23.1 -- Consent of Ernst & Young LLP, Independent Auditors.
23.2 -- Consent of Jackson Tufts Cole & Black, LLP (included in
Exhibit 5.1).
**24.1 -- Power(s) of Attorney (see page II-7).
**27.1 -- Financial Data Schedule.
</TABLE>
- ---------------
* To be filed by amendment.
** Previously filed.
+ Confidential Treatment Requested.
<PAGE> 1
EXHIBIT 10.11
INTERACTIVE MARKETING AGREEMENT
This Interactive Marketing Agreement (the "Agreement"), is made and
entered into as of March 1, 1998 (the "Effective Date"), by and between America
Online, Inc. ("AOL"), a Delaware corporation, with offices at 22000 AOL Way,
Dulles, Virginia 20166 and CyberSource Corporation, a/k/a "software.net" (the
"Marketing Partner" or "MP"), a California corporation, with offices at 3031
Tisch Way, Suite 900, San Jose, CA 95128 (each a "Party" and collectively the
"Parties").
INTRODUCTION
AOL and MP each desires to enter into an interactive marketing
relationship whereby AOL will promote MP, the MP Products and the digital
delivery of the MP Products through the interactive site referred to (and
further defined) herein as the Affiliated MP Site. This relationship is further
described below and is subject to the terms and conditions set forth in this
Agreement. Defined terms used herein but not defined in the body of the
Agreement shall be as defined in Exhibit B attached hereto.
TERMS
1. PROMOTION, DISTRIBUTION AND MARKETING.
1.1 AOL PROMOTION OF MP PRODUCTS AND AFFILIATED MP SITE. AOL will
provide MP with the promotions for MP, the MP Products and the
Affiliated MP Site described in Exhibit A attached hereto (the
"Promotions"). Subject to MP's reasonable approval, AOL will
have the right to fulfill its promotional commitments with
respect to any of the foregoing by providing MP with comparable
promotional placements in appropriate alternative areas of the
AOL Network. In addition, if AOL is unable to deliver any
particular Promotion described herein, subject to MP's
reasonable approval, AOL will provide MP, as its sole remedy,
with a comparable promotional placement. AOL reserves the right
to redesign or modify the organization, structure, "look and
feel," navigation and other elements of the AOL services at any
time. In the event such modifications materially and adversely
affect any specific Promotion described herein, subject to MP's
reasonable approval, AOL will provide MP, as its sole remedy,
with a comparable promotional placement.
1.2 IMPRESSIONS. During the Term, AOL will deliver the
following Impressions commitments through the Promotions (or any
comparable promotions as provided in Section 1.1 hereof) during
the following monthly periods (each a "Period"): [*] by the end
of the [*] month of the Term, [*] Impressions from the [*] month
to the end of [*] of the Term, and [*] month to the end of the
[*] month of the Term (which Impressions, together with the
Impressions delivered to MP pursuant to Section 1.3 hereof, as
adjusted from time to time in accordance with Section 1.3, are
hereinafter referred to as the "Impressions Commitment"). With
respect to the Impressions Commitment, AOL will not be obligated
to provide more than such target amounts, individually or in the
aggregate, in any given Period. Any shortfall in Impressions at
the end of a Period will not be deemed a breach of this
Agreement by AOL; instead, such shortfall will be added to the
Impressions target for the subsequent Period. In the event that
as of the Mutual Review Date, AOL shall not have provided a
minimum of [*] through the Promotions and the Additional
Promotions (the "Impressions Minimum"), AOL shall have a
reasonable time, not to exceed [*] within which to deliver the
Impressions Minimum. If AOL shall not have delivered the
Impressions Minimum within such [*] MP shall have the right for
fifteen (15) days to terminate this Agreement upon no less than
fifteen (15) days written notice to AOL, and within thirty (30)
days after such termination, [*] required pursuant to Section
4.1 hereof (the "Guaranteed Payments") [*]
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[*]. If there is a shortfall in Impressions as of the end of the
Initial Term (a "Final Shortfall"), AOL shall have the option to
(i) extend the initial Term (the "Extension Period") until the
earlier of (a) such time as AOL shall have delivered the number
of Impressions which comprise the Final Shortfall (the "Makegood
Impressions") or (b) six (6) months from the end of the Initial
Term; provided that, in the event that AOL shall not have
delivered the Makegood Impressions by the end of the Extension
Period, [*]. During the Extension Period, AOL shall maintain the
exclusivity provisions of Section 3.1 hereof.
1.3 ADDITIONAL IMPRESSIONS. In addition to the Promotions provided
to MP above, AOL shall provide promotions to MP (the "Additional
Promotions") in various categories of (i) the shareware area and
(ii) the web publishing section of the "On the Net" area of the
AOL Service Computing Channel as specified in Exhibit A-1
attached hereto. Additionally, should AOL create a channel or
other area relating to, or focused on, the [*], AOL shall use
commercially reasonable efforts to provide promotion to MP in
such channel or area. The Additional Promotions will deliver
approximately [*] Impressions to MP during the Term of the
Agreement as follows: [*] Impressions by the end of the [*]
month of the Term, [*] Impressions from the [*] month to the [*]
month of the Term, and [*] month to the end of the forty second
(42nd) month of the Term. In the event that MP shall desire to
exchange some of the Additional Promotions for other promotions
on the AOL Service, AOL will work with MP, in good faith, to
provide promotions to MP that are comparable to those provided
on Exhibit A-1.
1.4 CONTENT OF PROMOTIONS. The specific Content to be contained
within the Promotions (including, without limitation,
advertising banners, links, types of products advertised,
graphics, contextual promotions, and editorial Content) (the
"Promo Content") will be determined by MP, subject to (i) AOL's
technical limitations, (ii) the terms of this Agreement and
(iii) AOL's then standard and generally applicable policies
relating to advertising and promotions. AOL will furnish a copy
of the categories of such advertising policies to MP. Further,
AOL will notify MP of a change in such policies and upon the
request of MP, AOL shall furnish the text of any category of
advertising policies requested by MP to MP. MP will
consistently review and modify the Promo Content no less than
two times per week. The Parties will jointly consult with each
other regarding the Promo Content to ensure that it is designed
to maximize performance. Except to the extent expressly
described herein, the specific form, placement, duration and
nature of the Promotions will be determined by AOL in its
reasonable editorial discretion (consistent with the editorial
composition of the applicable screens).
1.5 USE OF PROMOTIONS. MP may sell the promotional spaces provided
herein to third parties in a manner consistent with its ongoing
business practices, provided that any promotional spaces sold to
a third party (i) may only promote the sale of MP Products
(excluding Ancillary Products), and (ii) must promote the sale
of such MP Products (excluding Ancillary Products), through the
Affiliated MP Site. Except to the extent expressly provided in
the preceding sentence, MP may not, nor shall it permit any
third party to, sell or offer to sell any of the promotional
spaces provided herein.
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1.6 MP PROMOTION OF AOL. MP will promote the availability of the
Affiliated MP Site through the AOL Network and will promote AOL as
more fully set forth in Exhibit C attached hereto.
2 AFFILIATED MP SITE.
2.1 CUSTOMIZED SITE. The Affiliated MOP Site shall be an optimized and
"mirrored" version of MP's main web site containing the specific
Content described in Section 2.2 below for distribution hereunder
according to AOL specifications and guidelines to ensure that (i) the
functionally and features within the Affiliated MP Site are optimized
for the client software then in use by a majority of AOL Members (as
determined by AOL and communicated to MP) and (ii) the forms used in
the Affiliated MP Site are designed and populated in a manner
intended to minimize delays when AOL Users attempt to access such
forms. The Affiliated MP Site may include up to four (4) Rainman
screens as mutually determined by AOL and MP. In the event that the
Parties shall create any Rainman screens, AOL shall determine, in its
sole discretion, which of its proprietary publishing tools (each a
"Tool") shall be made available to MP in order to develop and
implement the Rainman screens. Additionally, AOL shall provide MP
with an appropriate level of training with respect to the use of such
Tools, as determined by AOL in its sole discretion. MP shall be
granted a nonexclusive license to use any such Tool, which license
shall be subject to: (a) MP's compliance with all rules and
regulations relating to use of the Tools, as published from time to
time by AOL, (b) AOL's right to withdraw or modify such license at
any time, and (c) MP's express recognition that AOL provides all
Tools on an "as is" basis, without warranties of any kind.
2.1.1 SPECIFIC REQUIREMENTS.
(i) MP shall design the Affiliated MP Site to conform, in
all respects, with the provisions of Exhibit E attached
hereto, and
(ii) AOL reserves the right to review the Affiliated MP
Site to ensure that such site is compatible with AOL's
then-available client and host software and the AOL Network.
MP will take all necessary steps to conform its promotion
and sale of the MP Products through the Affiliated MP Site
to the then-existing technologies identified by AOL which
are optimized for the AOL Network. In consultation with MP,
AOL will be entitled to require reasonable changes to the
Content (including, without limitation, the features or
functionality) within the Affiliated MP Site to the extent
such Content will, in AOL's good faith judgment, adversely
affect any operational aspect of the AOL Network or the
online experience of any AOL User.
2.1.2 CUSTOMIZATION. MP shall customize the Affiliated MP Site
AOL Users as follows:
(i) create a customized home page "welcome mat" for the AOL
audience for each area on the Affiliated MP Site linked to
from the AOL Network on a continuous basis (each a "Welcome
Mat");
(ii) other than with respect to pre-packaged or pre-bundled
software, the packaging of which MP does not control, or
have the ability to control, ensure that AOL Users linking
to the Affiliated MP Site do not receive advertisements,
promotions or links for the products, services or content of
any other Interactive Service or any entity reasonably
construed to be in competition with AOL (such as, but not
limited to, MSN, Netscape, Yahoo); and
(iii) with the exception of advertising links sold and
implemented pursuant to this Agreement, provide continuous
navigational ability for AOL Users to
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return to an agreed-upon point on the AOL Network (for which AOL
shall supply the proper address) from the Affiliated MP Site
(e.g., the point on the AOL Network from which the Affiliated MP
Site is linked), which, at AOL's option, may be satisfied through
the use of a hybrid browser format.
2.2 CONTENT. MP will provide a comprehensive offering of the categories of MP
Products and other Content described in Exhibit D attached hereto, through
the Affiliated MP Site. The Parties acknowledge that Exhibit D shall be
modified from time to time by MP, provided that AOL shall have the right to
review such modifications, and to the extent that such modifications are
inconsistent with the sale of Software Products as provided herein, or
otherwise inconsistent with the provisions of this Agreement, AOL shall
have the right in its reasonable discretion, to reject such modifications.
MP will review, delete, edit, create, update and otherwise manage all
Content available on or through the Affiliated MP Site in accordance with
the terms of this Agreement or any amendments hereto. Except as otherwise
mutually agreed upon by the Parties hereto, the Affiliated MP Site shall
not contain Content (including without limitation, third party content)
relating to anything other than the categories of MP Products listed on
Exhibit D attached hereto.
2.3 PRODUCTION WORK. Except as agreed to in writing by the Parties pursuant to
the "Production Work" section of the Standard Online Commerce Terms &
Conditions attached hereto as Exhibit F, MP will be responsible for all
production work associated with the Affiliated MP Site, including all
related costs and expenses.
2.4 HOSTING; COMMUNICATIONS. MP will be responsible for all communications,
hosting and connectivity costs and expenses associated with the Affiliated
MP Site. In addition, MP will provide all computer, telephone and other
equipment or resources necessary for MP to access the AOL Network. MP and
AOL shall mutually agree upon, and reasonably cooperate in implementing,
the most appropriate means by which MP will connect the MP data center to
AOL's designated data center; provided, however, that in the event the
Parties determine that MP shall utilize a dedicated high speed connection
from the MP data center to AOL's designated data center, then MP shall be
responsible for all costs associated with such high speed connection.
2.5 PRODUCT OFFERING. MP will ensure that the Affiliated MP Site generally
includes all of the MP Products or Content (including, without limitation,
any features, offers, contests, functionality or technology) that are then
made available by or on behalf of MP through any Additional MP Channel and
which are not inconsistent with MP's other contractual obligations;
provided, however, that (i) such inclusion will not be required where it is
commercially or technically impractical to either Party (i.e., inclusion
would cause either Party to incur substantial incremental costs), and (ii)
specific material changes in scope, nature and/or offerings required by
such inclusion will be subject to AOL's review and approval and the terms
of this Agreement.
2.6 [*]
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[*]
2.7 [*]
2.8 OPERATING STANDARDS. MP will ensure that the Affiliated MP Site and
the delivery of the MP Products comply at all times with the standards
set forth in Exhibit E. To the extent site standards are not
established in Exhibit E with respect to any aspect or portion of the
Affiliated MP Site (or the MP Products or other Content contained
therein), MP will provide such aspect or portion at a level of
accuracy, quality, completeness, and timeliness which meets or exceeds
prevailing standards in the computer software industry. If at any time
during the Term MP fails to satisfy any requirement [*] of Exhibit
E AOL shall have the right (in addition to any other remedies
available to AOL hereunder) to reduce or cease placement of the
Promotions until such time as MP corrects its non-compliance (the
"Non-Compliance Period"), and if as a direct result of such
non-compliance AOL is unable to provide the Impressions required
hereunder during the Non-Compliance Period, AOL shall have the right
to reduce the Impressions Commitment, on a pro-rata basis, during the
Non-Compliance Period (e.g., if the Non-Compliance Period extends for
a period of two months, then AOL shall reduce the Impressions
Commitment by an amount equal to the product of two (2) times the
Impressions Commitment divided by forty two(42)).
2.9 NETWORK RESTRICTION. The Parties hereby agree that AOL shall have the
right, in its sole discretion, to reduce or cease placement of the
Promotions, or restrict access from the AOL Network to the Affiliated
MP Site (or any combination of the foregoing) (the "Network
Restriction Right") in the event that, as a result of the sale of the
MP Products in the manner contemplated hereby, and through no fault of
MP, the functional integrity of the AOL Network is compromised or the
ability of the AOL Network to adequately serve AOL Users is adversely
affected. If at any time during the Term AOL shall exercise the
Network Restriction Right for an aggregate of one hundred and twenty
(120) hours in any thirty (30) day period, then MP shall have the
right to request that AOL and MP monitor the Promotions and sales of
the MP Products through the Affiliated MP Site for a period of time
not to exceed forty five (45) days. If within such forty five (45) day
period, AOL and MP reasonably determine that the exercise of the
Network Restriction Right had a Material Adverse Effect on the sale of
the MP Products, the Parties shall renegotiate, in good faith, the
applicable terms of this Agreement for fifteen (15) days. If the
Parties cannot renegotiate the terms of the Agreement within such time
period, MP shall have the right for a period of fifteen (15) days to
terminate the Agreement as provided in Section 6.3 hereof, and within
thirty (30) days after such termination, MP or AOL, as the case may
be, [*]
[*]
---------
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[*]
[*]
[*]
[*]
[*]
2.10 ADVERTISING SALES. Subject to the terms hereof, MP shall have the
right to sell promotions, advertisements, links, pointers or
similar services or rights through the Affiliated MP Site
("Advertisements"). The specific advertising inventory within the
Affiliated MP Site shall be determined by MP. [*]
3. AOL EXCLUSIVITY OBLIGATIONS.
3.1 EXCLUSIVE PRODUCTS. Provided that MP is in compliance with all
material terms of this Agreement, during the Initial Term, MP
shall be the exclusive, third party, re-seller of Software
Products delivered to an end user of such Software Products via
an electronic, digital download format (the "Exclusive Software
Products"), promoted by AOL in the specific manner and on the
specific screens of the AOL Service and AOL.com as provided in
Exhibit A attached hereto. Additionally, MP shall be a
non-exclusive, third party, re-seller of Software Products
delivered to an end user of such Software Products in a
pre-packaged box or other physical container (the "Semi-Exclusive
Software Products") as promoted by AOL in the specific manner and
on the specific screens of the AOL Service and AOL.com provided
for in Exhibit A. With respect to Exhibit A, on screens
designated as "Comprehensive Exclusive," MP shall be the
exclusive, third party, reseller of the Exclusive and
Semi-Exclusive Software Products, and on screens designated as
"Semi-Exclusive", MP shall be the exclusive, third party,
reseller of the Exclusive Software Products and a non-exclusive,
third party, reseller of the Semi-Exclusive Software Products;
provided that no more than one (1) other retailer of the
Semi-Exclusive Products shall appear on such screens (the
"Excluded Retailer"). During the Initial Term, except for the
Excluded Retailer on the Semi-Exclusive screens, AOL shall not
(i) promote any third party Software Products on the screens of
the AOL Service or AOL.com on which MP has an exclusivity as
provided herein, or (ii) provide any promotions on such screens
which link to the first screen (which shall include any flash
screen or temporary screen/display presented to an AOL User upon
clicking on a Promotion) of any third party web site on which any
Software Product titles are promoted or sold, or on which
Software Products are predominantly promoted. With respect to any
third party, to the extent (i) the tradename or trademark of such
third party shall contain the words "download", "downloadable",
"download software" or "downloadable software", or (ii) the
marketing materials of such third party shall encourage the
purchase of the
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Exclusive or Semi-Exclusive Software Products, AOL shall not promote or
advertise such name or marketing material of such third party on any
screens of the AOL Service or AOL.com on which MP has an exclusivity as
provided herein. Notwithstanding the foregoing, to the extent that AOL
shall have the right to promote the Excluded Retailer, the foregoing
restrictions shall not apply to the promotion of Semi-Exclusive Software
Products by the Excluded Retailer.
3.2 [*]
[*]
[*]
[*]
[*]
[*]
[*]
[*]
[*]
[*]
[*]
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[*]
3.3 AOL STORE RESTRICTIONS. Subject to the provisions of this Agreement,
during the Initial Term and any Renewal Term during which AOL maintains
the exclusivity provisions hereof, (i) the AOL Store shall not
advertise, promote or sell the Exclusive Software Products on the AOL
Service or AOL.com, and (ii) MP shall have the right during each quarter
of the Initial Term to request that, other than with respect to Pop-Ups
as provided in Section 3.2(iii) above, the AOL Store shall not
advertise or promote (through banners, buttons or other types of
similar permanent placements) five (5) specific Software Product
titles offered by MP at such time and identified in writing by MP (each
a "Restricted Product"), subject at all times to the following:
(a) within five (5) days after the Effective Date, MP shall
submit a list of Restricted Products to AOL for the first
quarter of the Agreement; provided that, AOL has the right to
reject any Restricted Product on such list to the extent that
AOL is unable to remove such Restricted Product from the AOL
Store due to any existing binding arrangements of AOL. MP shall
resubmit additional Restricted Products to AOL until the Parties
have agreed upon five (5) Restricted Products;
(b) prior to changing any Restricted Product, MP shall provide
AOL with forty five (45) days written notice which shall contain
the name and SKU of each Restricted Product MP wishes to add;
(c) AOL shall have the right to promote the Restricted Products
on the AOL Service or AOL.com so long as such promotions
(except with respect to Pop-Ups) link solely to the Affiliated
MP Site;
(d) in the event that AOL shall advertise Software Products via
Non-Modal Pop-Ups, AOL shall not, to the extent technologically
feasible, display such Non-Modal Pop-Ups in any of the
following areas: (1) any screens in the Computing Channel and
Games Channel of the AOL Service on which MP has an exclusivity
as provided herein, (2) any screens on the Personal Finance Web
Channel of AOL.com on which MP has an exclusivity as provided
herein and (3) any screens of the Affiliated MP Site accessed
by any AOL User; and
(e) in addition to the payments required pursuant to Section 4
hereof, MP shall pay to AOL an amount equal to fifteen percent
(15%) of Gross Transaction Margins derived from the sale of the
Restricted Products through the Affiliated MP Site (the
"Restricted Product Revenue Share"); provided that, from and
after such time as MP shall have reached the Threshold, MP shall
no longer be required to pay to AOL the Restricted Product
Revenue Share.
3.4 [*]
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[*]
3.5 TRANSACTION PROCESSING. To the extent that AOL or any third
party other than MP sells Software Products that are digitally
delivered in an electronic download format on the AOL Service
or AOL.com, and provided that MP offers transaction processing
services that offer terms, rates and quality that are equal to,
or greater than, the top five (5) transaction processing
services in the software electronic download industry, AOL shall
consider the use of MP's transaction processing services related
to the sale of such Software Products on the AOL Service or
AOL.com.
3.6 AOL EXCLUSIVITIES. Notwithstanding the provisions of Section 3.1
above, MP shall not distribute any Exclusive or Semi-Exclusive
Products which are identical, or similar in nature to, any
products sold online by any existing or future partners of AOL
that are not Software Products, including, but not limited to,
books or other text based products and music compact disks
designed primarily for the retail sale of music or other similar
musical or audio based products; provided, however, that MP may
distribute categories of products that are packaged with,
ancillary to, or related to an Exclusive or Semi-Exclusive
Product and which constitute an integral part of such Exclusive
or Semi-Exclusive Product either by way of integration or by way
of instructions (the "Ancillary Products") as listed on Exhibit
D-1 attached hereto; and provided further that such Ancillary
Products shall be provided by MP at least two clicks away from
any screen on the AOL Service or AOL.com (including a Welcome
Mat) linking to the Affiliated MP Site.
3.7 PRODUCT OFFER RIGHT. If AOL shall determine that the sale of
certain Software Products is essential to a good AOL User
experience in, or necessary to the continued viability of,
any area of the AOL Service or AOL.com in which MP has an
exclusivity as provided herein, and provided that MP shall not
offer such Software Products for sale through the MP Affiliated
Site, MP shall have thirty (30) days after notice from AOL to
provide such Software Products, and if within such thirty (30)
day period MP is unable to provide such Software Products, AOL
shall have the right to provide such Software Products on the
AOL SERVICE OR AOL.com.
3.8 PERSONAL FINANCE CHANNEL RESTRICTION. In the event that MP shall
promote any third party in any of the promotional spaces
provided to MP in the Personal Finance Channel of the AOL
Service as set forth in Exhibit A, MP shall provide to AOL's
exclusive tax partner the opportunity to receive promotional
placements in the Personal Finance Channel on terms and
conditions (including, without limitation, scope, purpose,
amount, prominence or regularity) that are not less favorable
than the terms and conditions provided to such other third
party; provided that, in no event shall AOL's exclusive tax
partner be required to make any payments to MP in connection
with such promotional placements. To the extent that MP shall
comply with the foregoing requirements, and provided that AOL's
exclusive tax partner takes advantage of such promotions, MP
shall be entitled to deduct the value of the promotional spaces
provided to AOL's exclusive tax partner from the payments due to
AOL pursuant to Section 4.3 hereof.
4. PAYMENTS.
4.1 GUARANTEED PAYMENTS. Subject to the terms of this Agreement, MP
will pay to AOL a guaranteed payment of Twenty One Million
Dollars (US $21,000,000) as follows:
(i) [*] upon execution of this Agreement:
(ii) [*]
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(iii) [*] upon the occurrence of the earlier of [*] the
earlier of
(iv) [*] upon the occurrence of the one (1) year anniversary
of this Agreement; and
(v) [*] upon the occurrence of the two (2) year anniversary
of this Agreement.
4.2 [*]
4.3 [*]
4.4 ALTERNATIVE REVENUE STREAMS. In the event MP or any of its
affiliates (a) receives or desires to receive, directly or
indirectly, any compensation in connection with the Affiliated
MP Site other than Transaction Revenues or Advertising Revenues
(an "Alternative Revenue Stream"), or (b) desires to materially
alter or change its current business model (e.g., a change to an
Auction Format, Retail Club or the rental of Software Products)
(an "Alternative Business Model") MP will promptly inform AOL in
writing, and the Parties will negotiate in good faith regarding
whether MP will be allowed to (i) market products producing such
Alternative Revenue Stream through the Affiliated MP Site, or
(ii) create an Alternative Business Model and if so, the
equitable portion of revenues from such Alternative Revenue
Stream or Alternative Business Model (if applicable) that will
be shared with AOL (in no event less than the percentage of
Gross Transaction Margins to be paid to AOL pursuant to this
Section 4). In the event the Parties cannot in good faith reach
agreement regarding such Alternative Revenue Stream or
Alternative Business Model, MP shall refrain from implementing
the Alternative Revenue Stream or the Alternative Business
Model.
4.5 WIRED PAYMENTS; LATE PAYMENTS. All payments required under this
Section 4 will be paid in immediately available, non-refundable
funds wired to AOL's account. If (i) the amounts owed pursuant
to Section 4.1 are not paid within five (5) business days of
the date when such amounts are due and payable, or (ii) the
amounts owed pursuant to Sections 4.2 and 4.3 are not paid
within fifteen (15) days of the date when such amounts are due
and payable, then in addition to its other remedies
hereunder, AOL shall have the right to immediately terminate
this Agreement. Notwithstanding the foregoing, after such time
as AOL shall have received the payments required pursuant to
Section 4.1(a) (b) and (c) hereof, if the remaining amounts owed
pursuant to Section 4.1, 4.2 or 4.3 are not paid within five
(5) business days or fifteen (15) days, as the case may be, of
the date when such amounts are due and payable, AOL shall
notify MP and MP shall have one additional five (5) day
period from the date of notice within which to make such
payment. If after such time payment shall not have been
received by AOL, then in addition to its other remedies
hereunder, AOL shall have the right to immediately terminate
this Agreement. All amounts owed hereunder not paid when due
and payable will bear interest from the date such amounts are
due and payable at the prime rate in effect at such time.
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4.6 AUDITING RIGHTS. MP will maintain complete, clear and accurate
records of all expenses, revenues and fees in connection with
the performance of this Agreement. For the sole purpose of
ensuring compliance with this Agreement, AOL will have the
right, at its expense, to direct an independent certified
public accounting firm to execute a non-disclosure agreement
with MP and to conduct a reasonable and necessary inspection of
portions of the books and records of MP which are relevant to
MP's performance pursuant to this Agreement. Any such audit may
be conducted after twenty (20) business days prior written
notice.
4.7 TAXES. MP will collect and pay and indemnify and hold AOL
harmless from, any sales, use, excise, import or export value
added or similar tax or duty not based on AOL's net income,
arising from the license or sale of MP Products hereunder,
including any penalties and interest, as well as any costs
associated with the collection or withholding thereof, including
attorneys' fees.
4.8 REPORTS. MP will provide AOL with a monthly report in a
reasonable AOL-designated format agreed to by AOL and MP,
detailing the following activity in such month (and any other
information mutually agreed upon by the Parties or reasonably
required for measuring revenue activity by MP through the
Affiliated MP Site): summary sales information by day (date,
number of MP Products, number of orders, total Transaction
Revenues); and (ii) detailed sales information (order date/time
stamp (if technically feasible), purchaser name and screenname,
SKU or MP Product description) (the information in clauses (i)
and (ii) are collectively referred to herein as "Sales
Reports"). AOL will be entitled to use the Sales Reports in the
normal course of its business operations, subject to the
following: AOL will not disclose individual AOL Purchaser
Information to any third party. AOL will restrict its use of
the Sales Reports to (i) internal programming and advertising
rotation purposes and (ii) informational disclosures as part of
broader aggregate data regarding AOL Members. AOL will not use
the lists of user names of AOL Purchasers provided by MP to
AOL pursuant to this Section 4.8 to send targeted solicitations
marketing Software Products to such user names, provided that
the foregoing will not restrict AOL's ability to market any
products or services to its subscribers or any persons or
entities as part of more general marketing efforts which do not
exclusively make use of the screenname lists provided to AOL by
MP hereunder. More generally, each payment to be made by MP
pursuant to this Section 4 will be accompanied by a report
containing information which supports the payment, including
information identifying (i) gross Transaction Revenues and all
items deducted or excluded from gross Transaction Revenues to
produce Gross Transaction Margins, including, without
limitation, chargebacks and credits for returned or canceled
goods or services (and, where possible, an explanation of the
type of reason therefor, e.g., bad credit card information,
poor customer service, etc.) and (ii) any applicable
Advertising Revenues. AOL shall provide MP with standard
monthly usage information related to the Promotions which are
similar in substance and form to the reports provided by AOL to
other interactive marketing partners similar to MP.
5. WARRANTS [INTENTIONALLY OMITTED]
6. TERM; RENEWAL; TERMINATION.
6.1 TERM. Unless earlier terminated or extended as set forth
herein, the initial term of this Agreement will be forty two
(42) months from the Effective Date (the "Initial Term").
6.2 RENEWAL. Upon conclusion of the Initial Term, AOL shall have
the right to renew the Agreement for two successive one-year
renewal terms (each a "Renewal Term" and together with the
initial term, the "Term") by providing MP with notice of AOL'S
intention to renew the Agreement for a subsequent Renewal Term
no later than thirty (30) days prior to the commencement of
such Renewal Term. During any such Renewal Term: (i)
11
<PAGE> 12
[*]
6.3 TERMINATION FOR BREACH. Except as expressly provided elsewhere
in this Agreement, either Party may terminate this Agreement at
any time in the event of a material breach of the Agreement by
the other Party which remains uncured after thirty (30) days
written notice thereof to the other Party (or such shorter
period as may be specified elsewhere in this Agreement);
provided that, except as expressly set forth in Section 4.5
above, AOL will not be required to provide notice to MP in
connection with MP's failure to make any payment to AOL required
hereunder. Notwithstanding the foregoing, in the event of a
material breach of a provision that expressly requires action
to be completed within an express period shorter than thirty
(30) days, either Party may terminate this Agreement if the
breach remains uncured after written notice thereof to the
other Party.
6.4 TERMINATION FOR BANKRUPTCY/INSOLVENCY. Either Party may
terminate this Agreement immediately following written notice
to the other Party if the other Party (i) ceases ongoing
operations, (ii) becomes or is declared insolvent or bankrupt,
(iii) is the subject of any proceeding related to its
liquidation or insolvency (whether voluntary or involuntary)
which is not dismissed within ninety (90) calendar days or (iv)
makes an assignment for the benefit of creditors.
6.5 TERMINATION ON CHANGE OF CONTROL. In the event of a Change of
Control of MP resulting in control of MP by an Interactive
Service other than AOL, AOL may terminate this Agreement by
providing to MP thirty (30) days prior to written notice of
such intent to terminate.
6.6 [Intentionally Omitted]
6.7 EXPIRATION OF TERM. Upon expiration of the Term, AOL shall have
the right for a period not to exceed two (2) years to (a)
promote one or more "pointers" or links from the AOL Network to
the Affiliated MP Site or, at MP's option, to an MP Interactive
Site selling products substantially similar to the MP products,
and (b) use MP's tradenames, trademarks and service marks in
connection with such promotion. [*]
6.8 [*]
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<PAGE> 13
Agreement. In the event that the Parties cannot renegotiate the
applicable terms of this Agreement within thirty (30) days
following the end of the Monitoring Period, MP shall have the
right to terminate the Agreement upon no less than thirty (30)
days written notice to AOL, and within thirty (30) days of such
termination, MP or AOL, as the case may be, shall pay or
refund, respectively, the other, an amount equal to the
difference between (i) the Guaranteed Payments made to AOL to
date and (ii) an amount determined pursuant to the following
formula:
X = Y x (A/B)
Where X = Value delivered to date (based on impressions)
Y = Impressions delivered as of the termination date
less a pro-rata share of Impressions delivered
during the Monitoring Period (determined by reducing
the number of Impressions delivered during the
Monitoring Period in proportion to the reduction in
sales which occurred as a result of the Business
Model Change)
A = the Guaranteed Payments
B = the Impressions Commitment
provided that, if such amount is a positive number only AOL
shall have a payment obligation, and if such amount is a
negative number only MP shall have a payment obligation.
7. MANAGEMENT COMMITTEE/ARBITRATION. If the Parties are unable to resolve
any dispute, controversy or claim arising under this Agreement
(excluding any disputes relating to intellectual property rights or
confidentiality) (each a "Dispute"), such Dispute shall be submitted to
the Management Committee for resolution. If the Management Committee is
unable to resolve the Dispute within ten (10) business days after
submission to them, the Dispute shall be solely and finally settled by
arbitration in Washington, D.C. under the auspices of the American
Arbitration Association; provided that the Federal Rules of Evidence
shall apply in toto to any such Dispute and, subject to the arbitrators'
discretion to limit the time for and scope of discovery, the Federal
Rules of Civil Procedure shall apply with respect to discovery; and
provided further that, consistent with the parties' desire to avoid
delays and unnecessary expense, any Dispute arising from any provision
of the Agreement which expressly or implicitly provides for the parties
to reach mutual agreement as to certain terms therein shall not be
submitted to arbitration but shall be resolved in good faith by the
Management Committee. The arbitrator may enter a default decision
against any Party who fails to participate in the arbitration
proceedings. For purposes herein, the "Management Committee" shall mean
a committee made up of two (2) senior executives from each of the
Parties for the purpose resolving Disputes under this Section and
generally overseeing the relationship between the Parties contemplated
by this Agreement. Notwithstanding the foregoing, during the resolution
of any Dispute, the Parties hereto shall continue to make all payments
required hereunder.
13
<PAGE> 14
8. STANDARD TERMS. The Standard Online Commerce Terms & Conditions set
forth in Exhibit F attached hereto and Standard Legal Terms &
Conditions set forth on Exhibit G attached hereto are each hereby made
a part of this Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
Effective Date.
AMERICA ONLINE, INC. CYBERSOURCE CORPORATION
By: /s/ DAVID M. COLBURN By:
------------------------------ ------------------------------
David M. Colburn, William S. McKiernan,
Senior Vice President, President and CEO
AOL Networks
14
<PAGE> 15
8. STANDARD TERMS. The Standard Online Commerce Terms & Conditions set
forth in Exhibit F attached hereto and Standard Legal Terms &
Conditions set forth on Exhibit G attached hereto are each hereby made
a part of this Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
Effective Date.
AMERICA ONLINE, INC. CYBERSOURCE CORPORATION
By: By: /s/ WILLIAM S. McKIERNAN
------------------------------ ------------------------------
David M. Colburn, William S. McKiernan,
Senior Vice President, President and CEO
AOL Networks
14
<PAGE> 16
EXHIBIT A
PLACEMENT/PROMOTION PLAN
<TABLE>
<CAPTION>
Placement
- ----------------------------------------------------------------------------------------------------------
# SCREEN ITEM FREQUENCY
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Computing Channel Placement (Channel currently undergoing redesign)
- ----------------------------------------------------------------------------------------------------------
1 Channel Main Feature Product Promotion [*] [*]
- ----------------------------------------------------------------------------------------------------------
2 Download Software Integrated Promotion [*] [*]
- ----------------------------------------------------------------------------------------------------------
2 Download Software Feature Product Promotion [*] [*]
- ----------------------------------------------------------------------------------------------------------
3 Daily Download Integrated Promotion [*] [*]
- ----------------------------------------------------------------------------------------------------------
4 Companies Listing and rotational promotion [*] [*]
- ----------------------------------------------------------------------------------------------------------
5 Superstore Main 1 Promotion Box (rotating) + co-op box [*] [*]
- ----------------------------------------------------------------------------------------------------------
6 Superstore Main Product Search functionality - non - [*] [*]
branded
- ----------------------------------------------------------------------------------------------------------
7 Superstore Main Software Button [*] [*]
- ----------------------------------------------------------------------------------------------------------
8 Superstore Software Integration in Software Categories List [*] [*]
Category Box
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
9 Superstore Software Feature Product Promotion [*] [*]
Category
- ----------------------------------------------------------------------------------------------------------
10 Computing Channel Promotion [*] [*]
Software Search
- ----------------------------------------------------------------------------------------------------------
11 PC File Search Button Integration [*] [*]
Referee Screen
- ----------------------------------------------------------------------------------------------------------
12 Mac File Search Button Integration [*] [*]
Referee Screen
- ----------------------------------------------------------------------------------------------------------
13 Weekly Byte Newsletter Article Links [*] [*]
- ----------------------------------------------------------------------------------------------------------
14 Virus Information Integration [*] [*]
Center
- ----------------------------------------------------------------------------------------------------------
SHOPPING CHANNEL PLACEMENT
- ----------------------------------------------------------------------------------------------------------
15 Computing: Software Anchor + promotions [*] [*]
Department Main
- ----------------------------------------------------------------------------------------------------------
GAMES CHANNEL PLACEMENT
- ----------------------------------------------------------------------------------------------------------
16 Games Store Integration [*] [*]
- ----------------------------------------------------------------------------------------------------------
</TABLE>
15
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SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
<PAGE> 17
<TABLE>
<CAPTION>
# AREA ITEM FREQUENCY
---- ---- ---------
<S> <C> <C> <C> <C>
AOL NETFIND PLACEMENT
- ----------------------------------------------------------------------------------------------------------
17 Search Results Full Banner; Computing Package Keywords [*] [*]
- ----------------------------------------------------------------------------------------------------------
18 Web Site Reviews Full Banner; Computing Package Directory [*] [*]
- ----------------------------------------------------------------------------------------------------------
NETCHANNELS PLACEMENT
- ----------------------------------------------------------------------------------------------------------
19 Computing Web Integration [*] [*]
Channel
- ----------------------------------------------------------------------------------------------------------
20 Personal Finance Web Financial Mgmt Software Store, textual [*] [*]
Channel integration and hyperlink
- ----------------------------------------------------------------------------------------------------------
21 Entertainment Web Games/Entertainment Software Store, [*] [*]
Channel textual integration
- ----------------------------------------------------------------------------------------------------------
22 AOL Netfind Netfind Home Page Button or similar [*] [*]
Homepage promotions (e.g., AOL Instant Messenger,
AOL.com Home Page, Communities, General
Rotation)
- ----------------------------------------------------------------------------------------------------------
AOL Service Personal Finance Channel
- ----------------------------------------------------------------------------------------------------------
23 Personal Finance Integration into Tax Center Permanent [*]
Channel Tax Planning
- ----------------------------------------------------------------------------------------------------------
</TABLE>
For the purposes of this Exhibit A:
"Anchor" shall mean a prominent permanent placement.
"Permanent" shall mean a placement which is always present on a screen.
"Rotating" shall mean a non-Permanent presence on a screen.
Keywords
The Affiliated MP Site will be accessible from the AOL Network through the use
of the keywords "softwarenet" "software.net" (or such other keyword as AOL may
assign to MP in the case of a name change; provided, however, that such keyword
(i) shall at all times be subject to availability and (ii) shall be a
"non-generic" trademark of MP).
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<PAGE> 18
EXHIBIT A-1
ADDITIONAL PROMOTIONS
<TABLE>
<CAPTION>
- ------------------------------------------------
# SCREEN
- ------------------------------------------------
<S> <C> <C>
- ------------------------------------------------
1 Animation and Video [*]
Main
- ------------------------------------------------
2 Business and Finance [*]
Main
- ------------------------------------------------
3 Desktop Publishing [*]
Main
- -------------------------------------------------
4 Development and [*]
Programming Main
- -------------------------------------------------
5 Education and [*]
Reference Main
- -------------------------------------------------
6 Fun and Games Main [*]
- -------------------------------------------------
7 Graphics Main [*]
- -------------------------------------------------
8 Home and Hobbies [*]
Main
- -------------------------------------------------
9 Internet Main [*]
- -------------------------------------------------
10 Music and Sound Main [*]
- -------------------------------------------------
11 Network and Telecom [*]
Main
- -------------------------------------------------
12 Utilities and Tools Main [*]
- -------------------------------------------------
</TABLE>
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SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
<PAGE> 19
EXHIBIT B
Definitions
The following definitions will apply to this Agreement:
ADDITIONAL MP CHANNEL. Any other distribution channel (e.g., an Interactive
Service other than AOL) through which MP makes available an offering comparable
in nature to the Affiliated MP Site.
ADVERTISING REVENUES. The combination of AOL Advertising Revenues and Internet
Advertising Revenues:
AOL ADVERTISING REVENUES. (a) Aggregate amounts collected plus the fair
market value of any other compensation received (such as barter
advertising) by MP, or its agents, as the case may be, arising from the
license or sale of advertisements, promotions, links or sponsorships
("Advertisements") that appear within any pages of the Affiliated MP
Site or on any screens or forms preceding, framing or otherwise
directly associated with the Affiliated MP Site, less applicable
Advertising Sales Commissions and (b) a pro-rata portion of any co-op
marketing fees, or any similar fees collected by MP or its agents from
vendors ("Co-op Marketing Fees") for (i) "shelf space" in any MP
Interactive Site linked to from the AOL Network or (ii) direct
marketing efforts directed at any AOL Member or AOL User, as determined
by multiplying the amount of Co-op Marketing Fees collected by MP in
any given period of time by the quotient of (i) any Co-op Marketing
Fees derived from any Advertisements or marketing materials viewed by
AOL Users for such period of time divided by (ii) total Co-op Marketing
Fees derived from any Advertisements or marketing materials viewed by
all users for such period of time.
INTERNET ADVERTISING REVENUES. For each Advertisement on a page of the
Affiliated MP site or any MP Interactive Site which is not exclusively
available to AOL Users, the product of: (a) the amount collected plus
the fair market value of any other compensation received (such as
barter advertising) by MP or its agents arising from the license or
sale of such Advertisement attributable to a given period of time and
(b) the quotient of (i) Impressions on the page containing such
Advertisement by AOL Users for such period of time divided by (ii)
total Impressions on the page containing such Advertisement by all
users for such period of time (the "Internet Advertising Quotient")(or
such other percentage or formula as is mutually agreed upon in writing
by the Parties). MP will be responsible for calculating the Internet
Advertising Quotient related to Internet Advertising Revenues. In the
event that MP fails to perform such calculations, AOL has the right to
require MP to perform such calculations.
ADVERTISING SALES COMMISSION. (i) Actual amounts paid as commission to third
party agencies in connection with the sale of the Advertisement or [*] in
the event the Party has sold the Advertisement directly and will not be
deducting any third party agency commissions.
AFFILIATED MP SITE. The specific area to be promoted and distributed by AOL
hereunder through which MP can market and complete transactions regarding the
MP Products.
AOL INTERACTIVE SITE. Any Interactive Site which is managed, maintained, owned
or controlled by AOL or its agents.
AOL LOOK AND FEEL. The elements of graphics, design, organization,
presentation, layout, user interface, navigation and stylistic convention
(including the digital implementations thereof) which are generally associated
with Interactive Sites within the AOL Service or AOL.com.
AOL MEMBER. Any authorized user of the AOL Network, including any sub-accounts
using the AOL Network under an authorized master account.
18
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<PAGE> 20
AOL NETWORK. (i) The AOL Service, (ii) AOL.com and (iii) any other product or
service owned, operated, distributed or authorized to be distributed by or
through AOL or its affiliates worldwide (and including those properties
excluded from the definitions of the AOL Service or AOL.com).
AOL PURCHASER. (i) Any person or entity who enters the Affiliated MP Site from
the AOL Service or AOL.com including, without limitation, from any third party
area therein (to the extent entry from such third party area is traceable
through both Parties' commercially reasonable efforts), and generates
Transaction Revenues (regardless of whether such person or entity provides an
e-mail address during registration or entrance to the Affiliated MP Site which
includes a domain other than an "AOL.com" domain); and (ii) any other person or
entity who, when purchasing a product, good or service through an MP
Interactive Site, provides an AOL.com domain name as part of such person or
entity's e-mail address; provided that any person or entity who has previously
satisfied the definition of AOL Purchaser will remain an AOL Purchaser, and any
subsequent purchases by such person or entity will also give rise to
Transaction Revenues hereunder (and will not be conditioned on the person or
entity's satisfaction of clauses (i) or (ii) above) and (b) with respect to
clause (ii) above, an AOL Purchaser shall not mean any person or entity that is
listed on a disk to be provided by MP to AOL within forty five (45) days of the
Effective Date.
AOL SERVICE. The narrow-band U.S. version of the America Online(R) brand
service, specifically excluding (a) AOL.com or any other AOL Interactive Site,
(b) the international versions of the AOL Service (e.g., AOL Japan), (c)
"Driveway," "AOL NetFind(TM)," "AOL Instant Messenger(TM)" or any similar
product or service offered by or through the U.S. version of the America
Online(R) brand service, (d) any programming or content area offered by or
through the U.S. version of the America Online(R) brand service over which AOL
does not exercise complete or substantially complete operational control (e.g.,
Content areas owned, maintained or controlled by AOL Studios or other AOL
affiliates, "Digital Cities(TM)," "WorldPlay(TM)," "Entertainment Asylum(TM),"
the "Hub(TM)," or any similar "sub-service," third-party Content areas, and any
Interactive Site containing "members.aol.com" as part of its URL), (e) any
yellow pages, white pages, classifieds or other search, directory, or review
services or Content offered by or through the U.S. version of the America
Online(R) brand service, (f) any version of the U.S. version of the America
Online(R) brand service distributed through any broadband distribution platform
or through any platform or device other than a desktop personal computer, (g)
any co-branded or private label branded version of the America Online(R) brand
service and (h) any property, feature, product or service which AOL or its
affiliates may acquire from a third party subsequent to the Effective Date.
[*]
AOL USER. Any user of the AOL Service or AOL.com.
AOL.COM. AOL's Internet-based Interactive Site to which AOL Members are pointed
as the default access point from the AOL Service to the principal AOL controlled
aggregation of content and navigation services outside the AOL Service,
specifically excluding (a) the AOL Service, (b) any international versions of
AOL.com, (c) "Driveway," "AOL NetFind(TM)," "AOL Instant Messenger(TM)" or
any similar product or service offered by or through such site or any other AOL
Interactive Site, (d) any programming or content area offered by or through such
site or any other AOL Interactive Site over which AOL does not exercise complete
or substantially complete operational control (e.g., Content areas owned,
maintained or controlled by AOL Studios or other AOL affiliates, "Digital
Cities(TM)," "WorldPlay(TM)," "Entertainment Asylum(TM)," the "Hub(TM)," or any
similar "sub-service," third-party Content areas, and any Interactive Site
containing "members.aol.com" as part of its URL), (e) any yellow pages, white
pages, classifieds or other search or directory services offered by or through
such site or any other AOL Interactive Site, (f) any version of such site
distributed through any broadband distribution platform or through any platform
or device other than a desktop personal computer, (g) any co-branded or private
label branded version of such site, and (h) any property, feature, product or
service which AOL or its affiliates may acquire from a third party subsequent to
the Effective Date.
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<PAGE> 21
AUCTION FORMAT. A format whereby products are sold through the bidding by one
or more individuals or entities on a product or group of products, and the
price of such product or group of products is determined by the price paid by
the highest bidder.
CHANGE OF CONTROL. (a) The consummation of a reorganization, merger or
consolidation or sale or other disposition of substantially all of the assets
of a party; or (b) the acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under such Act) of more than 50% of either (i) the then
outstanding shares of common stock of such party; or (ii) the combined voting
power of the then outstanding voting securities of such party entitled to vote
generally in the election of directors.
CONFIDENTIAL INFORMATION. Any information relating to or disclosed in the
course of the Agreement, which is or should be reasonably understood to be
confidential or proprietary to the disclosing Party, including, but not limited
to, the material terms of this Agreement, information about AOL Members, AOL
Users, AOL Purchasers and MP customers, technical processes and formulas,
source codes, product designs, sales, cost and other unpublished financial
information, product and business plans, projections, and marketing data.
"Confidential Information" will not include information (a) already lawfully
known to or independently developed by the receiving Party, (b) disclosed in
published materials, (c) generally known to the public, or (d) lawfully
obtained from any third party.
CONTENT. Information, materials, features, products, advertisements,
promotions, links, pointers and software, including any modifications,
upgrades, updates, enhancements and related documentation.
FINANCING EVENT. Either (a) the receipt of equity funding of at least Seven
Million Dollars (US $7,000,000) by MP from a private investor or group of
investors or (b) the receipt of equity funding by MP as a result of the
initial public offering of securities of MP pursuant to an effective
registration statement under the Securities Act of 1933, as amended.
GROSS MARGINS. The sum total of Gross Transaction Margins and Advertising
Revenues derived pursuant to this Agreement.
GROSS TRANSACTION MARGINS. Aggregate amounts paid by AOL Purchasers in
connection with the sale, licensing, distribution or provision of any MP
Products, but excluding, in each case, the price paid to suppliers for the
products and/or services sold, credit card charges, credits and chargebacks for
returned or canceled goods or services, refunds, handling and shipping charges
(to the extent such charges are competitive) and amounts collected for sales or
use taxes or duties.
IMPRESSION. User exposure to the page containing the applicable Promotion as
set forth in Exhibit A, which links to the Affiliated MP Site, as such exposure
may be reasonably determined and measured by AOL in accordance with its
standard methodologies and protocols.
INTERACTIVE SERVICE. Any entity that offers online or Internet connectivity (or
any successor form of connectivity), aggregates and/or distributes a broad
selection of third-party interactive Content, or provides interactive
navigational services (including, without limitation, any online service
providers, Internet service providers, WebTV, @Home or other broadband
providers, search or directory providers, "push" product providers such as the
Pointcast Network or providers of interactive navigational environments such as
Microsoft's proposed "Active Desktop").
INTERACTIVE SITE. Any interactive site or area, including, by way of example
and without limitation, (i) an MP site on the World Wide Web portion of the
Internet or (ii) a channel or area delivered through a "push" product such as
the Pointcast Network or interactive environment such as Microsoft's proposed
"Active Desktop."
20
<PAGE> 22
LICENSED CONTENT. All Content offered through the Affiliated MP Site pursuant
to this Agreement or otherwise provided to AOL by MP for related purposes
(e.g., Promotions, AOL "slide shows", etc.), including in each case, any
modifications, upgrades, updates, enhancements, and related documentation.
MATERIAL ADVERSE EFFECT. A reduction of at least fifteen percent (15%) in
revenues from the sale of MP Products in comparison to the immediately
preceding two (2) months in sales of the MP Products; provided that the fifteen
percent (15%) reduction in revenues shall not be due to seasonal fluctuations
in sales of the MP Products as determined by a review of general sales patterns
in MP's industry or a review of MP's historical sales patterns with respect to
the MP Products.
MP INTERACTIVE SITE. Any Interactive Site (other than the Affiliated MP Site)
which is managed, maintained, owned or controlled by MP or its agents.
MP PRODUCT. Any product, good or service which MP (or others acting on its
behalf or as distributors) offers, sells, provides, distributes or licenses to
AOL Users directly or indirectly through (i) the Affiliated MP Site (including
through any Interactive Site linked thereto) and which fall in the categories
of products listed on Exhibit D to the Agreement, (ii) any other online means
related to an AOL User's visit to the MP Affiliated Site (e.g., e-mail offers
following user registration), or (iii) an "offline" means (e.g., toll-free
number) for receiving orders related to specific offers within the Affiliated
MP Site requiring purchasers to reference a specific promotional identifier or
tracking code, including, without limitation, products sold through surcharged
downloads (to the extent expressly permitted hereunder).
MUTUAL REVIEW DATE. Eighteen (18) months from the Effective Date.
[*]
RETAIL CLUB. Either (a) a business which sells a collection of goods, services
or products and derives a substantial portion of its revenues from subscription
fees paid by its members in order to gain access to such goods, services or
products (e.g.: CUC International), or (b) a business which initially offers
goods or services to its members at a steep discount in return for a
contractual commitment from such members to purchase a certain number of
goods or services at some future date (e.g.: Columbia Record Club or BMG Music
Club).
RUN OF SERVICE. Random, service-wide, non-placement specific advertising
placements.
SOFTWARE PRODUCTS. Compiled object code applications written in a clearly
defined programming language (e.g. word processing applications computer games,
tax programs, financial calculation applications and educational programs)
which are commercially sold to consumers through a retail store (online or
offline), or outlet.
THRESHOLD. Gross Margins generated by MP hereunder equal to Twenty One Million
Dollars (US $21,000,000) plus the Restricted Product Revenue Share amounts
generated pursuant to Section 3.3 of the Agreement.
TRANSACTION REVENUES. Aggregate amounts paid by AOL Purchasers in connection
with the sale, licensing, distribution or provision of any MP Products.
21
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<PAGE> 23
EXHIBIT C
MP CROSS-PROMOTION
Online
To the extent that MP, provides a promotional banner, button, link or other
promotional presence (a "Promotional Presence") to any other Interactive
Service in an MP Interactive Site, MP shall offer a Promotional Presence to AOL
in such MP Interactive Site linking to such areas of the AOL Network as
determined by AOL and to the extent that MP provides promotional information
about the products of any other Interactive Service, MP shall offer to AOL a
prominent "Try AOL" feature where users can obtain promotional information
about AOL products and services and, at AOL's option, download or order AOL's
then-current version of client software for the AOL Service or software for
any other AOL products or services (e.g., AOL's Instant Messenger service) on
terms and conditions (including, without limitation, scope, purpose, amount,
prominence or regularity) that are no less favorable than the terms and
conditions provided to such other Interactive Service(1). MP shall make the
foregoing offers to AOL within fifteen (15) days of providing a Promotional
Presence to any other Interactive Service. To the extent that MP shall undertake
any of the foregoing promotions with respect to AOL, MP shall also promote AOL
as its preferred Interactive Service with respect to such MP Interactive Site.
Notwithstanding the foregoing, in the event that MP shall design and create a
customized MP Interactive Site which is not generally available to AOL Users,
MP shall not be required to undertake the foregoing promotional obligations
with respect to AOL.
Offline
In MP's televisions, radio and print advertisements and in any publications,
programs, features or other forms of media over which MP exercises at least
partial editorial control, MP shall use commercially reasonable efforts to
include the following:
o Specific reference or mentions (verbally where possible) of the Affiliated
MP Site's availability through America Online(R) prior to, and at least as
prominent as, any reference to any MP Interactive Site; and
o For instance, listing of the "URL(s)" the MP Interactive Site will be
accompanied by the AOL "keyword" for the Affiliated MP Site.
Member Acquisition Programs
The Parties shall negotiate, in good faith, various AOL member acquisition
programs, including without limitation, the bundling of AOL software with
products shipped by MP to existing MP customers who are not AOL Members(2).
- ------------
(1) AOL will pay MP a one-time standard bounty for each person who registers
for the AOL Network using MP's special identifier for this promotion and
subsequently pays AOL monthly usage fees across at least three billing cycles
for the use of the AOL Network. Note that if this promotion is delivered
through Microsoft's Active Desktop or any other "push" product (an "Operating
System"), such feature will link users directly to AOL software within the
Operating System or direct users without Internet access to an AOL application
setup program within the Operating System (all subject to any standard policies
of the Operating System).
(2) AOL will pay MP a one-time standard bounty for each person who registers
for the AOL Network using MP's special identifier for this promotion and
subsequently pays AOL monthly usage fees across at least three billing cycles
for the use of the AOL Network.
22
<PAGE> 24
EXHIBIT D
DESCRIPTION OF MP PRODUCTS AND OTHER CONTENT
Description of MP Products and Other Content
Software.net resells approximately 30,000 software titles from more than 1,000
vendors. The product offerings span a broad cross-section of software and
content. This software and content supports a variety of operating systems,
including Microsoft, Microsoft DOS, Macintosh and UNIX, Products are delivered
via ESD (electronic software download) technology and/or via traditional boxes.
Categories include:
Accounting Software
Back-up Software
CAD Software
Clip Art, Symbol & Image Libraries
Communications Software
Database Software
Desktop Publishing Software
Diagnostic Software
E-Mail, Groupware & Video Conference Software
Education & Edutainment Software
Fax, OCR & Document Imaging Software
File Conversion & File Transfer Software
Font Software
Forms Generator, Designer & Filler Software
Games & Entertainment Software
General Business Software
General Utility Software
Graphics & Presentation Graphics Software
Internet Software
Memory Manager Software
Menu Software & Desktop Organizers
Multimedia Software
Network Management & Utility Software
News & Business Information
Operating System Software
Plug-ins
Printer Utility Software
Programming Languages & Utilities
Project & Time Management Software
Reference & Information Software
Reusable Software Components
Screen Saver Software
Security Software
Statistics Software
Suites & Integrated Software Packages
Tax Software
Termination Emulation Software
Virus Detection Software
Voice Recognition Software
Word Processor Software
Try-Before-You Buy Demo
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Major software vendors include:
Microsoft
Lotus/IBM
Adobe
Symantec
Apple Computer
Netscape
Qualcomm
Intuit
MacAfee
Non-content information
Product descriptions
Third party product reviews
Marketing collateral
Merchandising
Support Directory and Resources
Product Forum
Product Ratings
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EXHIBIT D-1
ANCILLARY PRODUCT CATEGORIES
a. Documentation, manuals, instructional and training materials (e.g.,
videotapes, CD-ROM'S, DVD'S, and user guides),
b. Add-on and upgrade products (e.g., templates, fonts, clip art).
c. Consumable items (special stationery or other special paper).
d. Peripheral hardware equipment required for the correct operation of
software (e.g., dongles, microphones and cables) and other hardware
products packed with and essential to the use of software products.
The foregoing list may be modified by MP from time to time, as mutually agreed
upon by AOL and MP.
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EXHIBIT E
OPERATING STANDARDS
1. General. The Affiliated MP Site (including the MP Products and other
Content contained therein) will be in the top ten (10) in the computer software
industry, as determined by each of the following methods: (a) based on a
cross-section of third-party reviewers who are recognized authorities in such
industry and (b) with respect to all material quality averages or standards in
such industry including each of the following: (i) pricing of MP Products, (ii)
scope and selection of MP Products, (iii) quality of MP Products, (iv) customer
service and fulfillment associated with the marketing and sale of MP Products
and (v) ease of use. In addition, the Affiliated MP Site will, with respect to
each of the measures listed above, be generally competitive in all material
respects with that which is offered by any MP Competitors. In the event that MP
disagrees with AOL's determination with respect to the foregoing, the Parties
shall submit the matter to the Management Committee as provided in Section 7 of
the body of the Agreement.
2. Hosting; Capacity. MP will provide all computer servers, routers,
switches and associated hardware in an amount reasonably necessary to meet
anticipated traffic demands, adequate power supply (including generator
back-up) and HVAC, adequate insurance, adequate service contracts and all
necessary equipment racks, floor space, network cabling and power distribution
to support the Affiliated MP Site.
3. Speed; Accessibility. MP will ensure that the performance and
availability of the Affiliated MP Site (a) is monitored on a continuous, 24/7
basis and (b) remains competitive in all material respects with the performance
and availability of other similar sites based on similar form technology.
4. User Interface. MP will maintain a graphical user interface within the
Affiliated MP Site that is competitive in all material respects with interfaces
of other similar sites based on similar technology. AOL reserves the right to
conduct focus group testing to assess compliance herewith.
5. Service Level Response. MP agrees to provide the following service levels
in response to problems with or improvements to the Affiliated MP Site.
o For material functions of software that are or have become substantially
inoperable, MP will provided a bug fix or workaround within two (2)
business days after the first report of such error.
o For functions of the software that are impaired or otherwise fail to
operate in accordance with agreed upon specifications, MP will provide a
bug fix or workaround within three (3) business days after the first report
of such error.
o For errors disabling only certain non-essential functions, MP will provide
a bug fix or workaround within sixty (60) days after the first report of
such error.
o For all other errors, MP will address these results on a case-by-case basis
as soon as reasonably feasible.
6. Monitoring. AOL Network Operations Center will work with a MP-designated
technical contact in the event of any performance malfunction or other
emergency related to the Affiliated MP Site and will either assist or work in
parallel with MP's contact using MP tools and procedures, as applicable. The
Parties will develop a process to monitor performance and member behavior with
respect to access, capacity, security and related issues both during normal
operations and during special promotion/events.
7. Telecommunications. The Parties agree to explore encryption methodology
to secure data communications between the Parties' data centers. The network
between the Parties will be configured such that no single component failure
will significantly impact AOL Users. The network will be sized such that no
single line runs at more than 70% average utilization for a 5-minute peak in a
daily period.
8. Security Review. MP and AOL will work together to perform an initial
security review of, and to perform tests of the MP system, network, and service
security in order to evaluates the security risks and provides recommendations
to MP, including periodic follow-up reviews as reasonably required by MP or
AOL. MP will fix any security risks or breaches of security as may be
identified by AOL's Operations Security. Specific services to be performed on
behalf of AOL's Operations Security team will be as determined by AOL in its
sole discretion.
9. Technical Performance. MP will perform the following technical
obligations (and any updates thereto provided by AOL from time to time):
o MP will design the Affiliated MP Site to support the Windows version of the
Microsoft Internet Explorer 4.0 browser, and make commercially reasonable
efforts to support all other AOL browsers listed at:
"http://webmaster.info.aol.com/BrowTable.html."
o MP will configure the server from which it serves the site to examine the
HTTP User-Agent filed in order to identify the "AOL Member-Agents" listed
at "http://webmaster.info.aol.com/Brow2Text.html."
o MP will design its site to support HTTP 1.0 or later protocol as defined in
RFC 1945 (available at "http://ds.intemic.net/rfc/rfc1945.text" and to
adhere to
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AOL's parameters for refreshing cached information listed at
"http://webmaster.info.aol.com/CacheText.html."
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EXHIBIT F
STANDARD ONLINE COMMERCE TERMS & CONDITIONS
1. AOL NETWORK DISTRIBUTION. MP will not authorize or permit any third party
to distribute or promise the MP Products or any MP interactive Site through the
AOL Network absent AOL's prior written approval. The Promotions and any other
promotion or advertisement purchased from or provided by AOL will link only to
the Affiliated MP Site.
2. PROVISION OF OTHER CONTENT. In the event that AOL notifies MP that (i) as
reasonably determined by AOL, any Content within the Affiliated MP Site
violates AOL's then-standard Terms of Service (as set forth on the America
Online(R) brand service), the terms of this Agreement or any other standard,
written AOL policy or (ii) AOL reasonably objects to the inclusion of any
Content within the Affiliated MP Site (other than any specific items of Content
which may be expressly identified in this Agreement), then MP will take
commercially reasonable steps to block access by AOL Users to such Content
using MP's then-available technology. In the event that MP cannot, through its
commercially reasonable efforts, block access by AOL Users to the Content in
question, then MP will provide AOL prompt written notice of such fact. AOL may
then, at its option, restrict access from the AOL Network to the Content in
question using technology available to AOL. MP will cooperate with AOL's
reasonable requests to the extent AOL elects to implement any such access
restrictions.
3. CONTESTS. MP will take all steps necessary to ensure that any contest,
sweepstakes or similar promotion conducted or promoted through the Affiliated
MP Site (a "Contest") complies with all applicable federal, state and local
laws and regulations.
4. NAVIGATIONAL ICONS. Subject to the prior consent of MP, which consent will
not be unreasonably withheld, AOL will be entitled to establish navigational
icons, links and pointers connecting the Affiliated MP Site (or portions
thereof) with other content areas on or outside of the AOL Network.
5. DISCLAIMERS. Upon AOL's request, MP agrees to include within the
Affiliated MP Site a product disclaimer (the specific form and substance to be
mutually agreed upon by the Parties) indicating that transactions are solely
between MP and AOL Users purchasing MP Products from MP.
6. AOL LOOK AND FEEL. MP acknowledges and agrees that AOL will own all
right, title and interest in and to the elements of graphics, design,
organization, presentation, layout, user interface, navigation and stylistic
convention (including the digital implementations thereof) which are generally
associated with online areas contained within the AOL Network ("the AOL Look
and Feel"), subject to MP's ownership rights in any MP trademarks, service
marks, tradenames or copyrighted material within the Affiliated MP Site and
subject to MP's ownership rights to patents and technology trade secrets and
know-how.
7. MANAGEMENT OF THE AFFILIATED MP SITE. MP will manage, review, delete,
edit, create, update and otherwise manage all MP Products available on or
through the Affiliated MP Site, in a timely and professional manner and in
accordance with the terms of this Agreement. MP will ensure that each
Affiliated MP Site is current, accurate and well-organized at all times. MP
warrants that the MP Products, any other Content contained therein and any
technology used by MP in connection with the delivery of the MP Products: (i)
will not infringe on or violate any copyright, trademark, U.S. patent or any
other third party right, including without limitation, any music performance or
other music-related rights; (ii) will not violate AOL's then-applicable Terms
of Service; and (iii) will not violate any applicable law or regulation,
including those relating to contests, sweepstakes or similar promotions.
Additionally, MP represents and warrants that it owns or has a valid license to
all rights to any Licensed Content used in AOL "slide show" or other formats
embodying elements such as graphics, animation and sound, free and clear of all
encumbrances and without violating the right of any other person or entity. MP
also warrants that a reasonable basis exists for all MP Product performance or
comparison claims appearing through the Affiliated MP Site. AOL will have no
obligations with respect to the MP Products available on or through the
Affiliated MP Site, including, but not limited to, any duty to review or
monitor any such MP Products.
8. DUTY TO INFORM. MP will promptly inform AOL of any information related to
the MP Products or Affiliated MP Site which could reasonably lead to a claim,
demand, or liability of or against AOL and/or its affiliates by any third party.
9. CUSTOMER SERVICE. It is the sole responsibility of MP to provide customer
service to persons or entities purchasing MP Products through the AOL Network
("Customers"). AOL will have no obligations whatsoever with respect to customer
service in connection with the sale of MP Products, including without
limitation, order processing, billing, fulfillment, shipment, collection and
other customer service associated with any MP Products
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offered, sold or licensed through the Affiliated MP Site. MP will receive all
e-mails from Customers via a computer available to MP's customer service staff
and generally respond to such e-mails within one business day of receipt. MP
will receive all orders electronically and generally process all orders within
one business day of receipt, provided MP Products ordered are not advance order
items. MP will ensure that all orders of MP Products are received, processed,
fulfilled and delivered on a timely and professional basis. MP will offer AOL
Users who purchase MP Products through such Affiliated MP Site a thirty (30)
day money back satisfaction guarantee with respect to the delivery process
associated with the purchase of the MP Products and any representations in
connection therewith. Additionally, to the extent that the manufacturer of any
MP Product offers a money back guarantee with respect to such MP Product, MP
shall ensure that such money back guarantee is passed on to AOL Users who
purchase MP Products. MP will bear all responsibility for compliance with
federal, state and local laws in the event that MP Products are out of stock or
are no longer available at the time an order is received. MP will also comply
with the requirements of any federal, state or local consumer protection or
disclosure law. Payment for MP Products will be collected by MP directly from
customers. MP's order fulfillment operation will be subject to AOL's reasonable
review.
10. Production Work. In the event that MP requests AOL's production assistance
in connection with (i) ongoing programming and maintenance related to the
Affiliated MP Site, (ii) a redesign of or addition to the Affiliated MP Site
(e.g., a change to an existing screen format or construction of a new custom
form), (iii) production to modify work performed by a third party provider or
(iv) any other type of production work, MP will work with AOL to develop a
detailed production plan for the requested production assistance (the
"Production Plan"). Following receipt of the final Production Plan, AOL will
notify MP of (i) AOL's availability to perform the requested production work,
(ii) the proposed fee or fee structure for the requested production and
maintenance work and (iii) the estimated development schedule for such work. To
the extent the Parties reach agreement regarding implementation of agreed-upon
Production Plan, such agreement will be reflected in a separate work order
signed by the Parties. To the extent MP elects to retain a third party provider
to perform any such production work, work produced by such third party provider
must generally conform to AOL's production Standards & Practices (a copy of
which will be supplied by AOL to MP upon request). The specific production
resources which AOL allocates to any production work to be performed on behalf
of MP will be as determined by AOL in its sole discretion.
11. Overhead Accounts. To the extent AOL has granted MP any overhead accounts
on the AOL service, MP will be responsible for the actions taken under or
through its overhead accounts, which actions are subject to AOL's applicable
Terms of Service and for any surcharges, including, without limitation, all
premium charges, transaction charges, and any applicable communication
surcharges incurred by any overhead Account issued to MP, but MP will not be
liable for charges incurred by any overhead account relating to AOL's standard
monthly usage fees and standard hourly charges, which charges AOL will bear.
Upon the termination of this Agreement, all overhead accounts, related
screennames and any associated usage credits or similar rights, will
automatically terminate. AOL will have no liability for loss of any data or
content related to the proper termination of any overhead account.
12. AOL User Communications. To the extent MP sends any form of communications
to AOL Users, MP will promote the Affiliated MP Site as the location at which to
purchase Products (as compared to any more general or other site or
location). In addition, MP will not encourage AOL Users to take any action
inconsistent with the scope and purpose of this Agreement, including without
limitation, the following actions: (a) using Content other than the Licensed
Content; (b) bookmarking of interactive Sites other than the Affiliated MP
Site; (c) using interactive Sites other than those covered by the
revenue-sharing provisions herein; (d) changing the default home page on the
AOL browser; or (e) using any interactive Service other than AOL.
13. Merchant Certification Program. MP will participate in any generally
applicable "Certified Merchant" program operated by AOL or its authorized
agents or contractors. Such program may require merchant participants on an
ongoing basis to meet certain reasonable standards relating to provision of
electronic commerce through the AOL Network (including, as a minimum, use of
40-bit SSL encryption and if requested by AOL, 128-bit encryption) and may
also require the payment of certain reasonable certification fees to the
applicable entity operating the program. Each Certified Merchant in good
standing will be entitled to place on its affiliated Interactive Site an AOL
designed and approved button promoting the merchant's status as an AOL
Certified Merchant.
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EXHIBIT G
STANDARD LEGAL TERMS & CONDITIONS
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1. Promotional Materials/Press Releases. Each Party will submit to the other
Party, for its prior written approval, which will not be unreasonably withheld
or delayed, any marketing, advertising, press releases, and all other
promotional materials related to the Affiliated MP Site and/or referencing (the
other Party and/or its trade names, trademarks, and service marks the
"Materials"); provided, however, that either Party's use of screen shots of the
Affiliated MP Site for promotional purposes will not require the approval of
the other Party so long as America Online(R) is clearly identified as the
sources of such screen shots. Each Party will solicit and reasonably consider
the views of the other Party in designing and implementing such Materials. Once
approved, the Materials may be used by a Party and its affiliates for the
purpose of promoting the Affiliated MP Site and the content contained therein
and reused for such purpose until such approval is withdrawn with reasonable
prior notice. In the event such approval is withdrawn, existing inventories of
Materials may be depleted. Notwithstanding the foregoing, either Party may
issue press releases and other disclosures as required by law or as reasonably
advised by legal counsel without the consent of the other Party and in such
event, prompt notice thereof will be provided to the other Party.
2. License. MP hereby grants AOL a non-exclusive worldwide license to market,
license, distribute, reproduce, display, perform, transmit and promote the
Licensed Content, or any portion thereof, (excluding any products contained
therein) through such areas or features of the AOL Network as AOL deems
appropriate. MP acknowledges and agrees that the foregoing license permits AOL
to distribute portions of the Licensed Content in synchronism or timed relation
with visual materials prepared by MP or AOL (e.g., as part of an AOL "slide
show"). In addition, AOL Users will have the right to access and use the
Affiliated MP Site.
3. Trademark License. In designing and implementing the Materials and subject
to the other provisions contained herein, MP will be entitled to use the
following trade names, trademarks, and service marks and AOL: the "America
Online)(R) brand service, "AOL(TM)" service/software and AOL's triangle logo;
and AOL and its affiliates will be entitled to use the trade names,
trademarks, and service marks of MP (collectively, together with the AOL marks
listed above, the "Marks"); provided that each Party: (i) does not create a
unitary composite mark involving a Mark of the other Party without the prior
written approval of such other Party; and (ii) displays symbols and notices
clearly and sufficiently indicating the trademark status and ownership of the
other Party's Marks in accordance with applicable trademark law and practice.
4. Ownership of Trademarks. Each Party acknowledges the ownership of the
other Party in the Marks of the other Party and agrees that all use of the
other Party's Marks will inure to the benefit, and be on behalf, of the other
Party. Each Party acknowledges that its utilization of the other Party's Marks
will not create in it, nor will it represent it has, any right, title, or
interest in or to such Marks other than the license expressly granted herein.
Each Party agrees not to do anything contesting or impairing the trademark
rights of the other Party.
5. Quality Standards. Each Party agrees that the nature and quality of its
products and services supplied in connection with the other Party's Marks will
conform to quality standards set by the other Party. Each Party agrees to
supply the other Party, upon request, with a reasonable number of samples of
any Materials publicly disseminated by such Party which utilize the other
Party's Marks. Each Party will comply with all applicable laws, regulations,
and customs and obtain any required government approvals pertaining to use of
the other Party's marks.
6. Infringement Proceedings. Each Party agrees to promptly notify the other
Party of any unauthorized use of the other Party's Marks of which it has actual
knowledge. Each Party will have the sole right and discretion to bring
proceedings alleging infringement of its Marks or unfair competition related
thereto; provided, however, that each Party agrees to provide the other Party
with its reasonable cooperation and assistance with respect to any such
infringement proceedings.
7. Representations and Warranties. Each Party represents and warrants to the
other Party that: (i) such Party has the full corporate right, power and
authority to enter into this Agreement and to perform the acts required of it
hereunder; (ii) the execution of this Agreement by such Party, and the
performance by such Party of its obligations and duties hereunder, do not and
will not violate any agreements to which such Party is a party or by which it
is otherwise bound, and that such Party is not currently a party to any
agreement which would prevent it from performing its obligations under this
Agreement or which would nullify the exclusively obligations of Section 3.1
hereof; (iii) when executed and delivered by such Party, this Agreement will
constitute the legal, valid and binding obligation of such Party, enforceable
against such Party in accordance with its terms; and (iv) such Party
acknowledges that the other Party makes no representations, warranties or
agreements related to the subject matter hereof that are not expressly provided
for in this Agreement. MP hereby represents and warrants that it possesses all
authorizations, approvals, consents, licenses, permits, certificates or other
rights and permissions necessary to sell the MP Products, and the MP Products
shall be free from all bugs, viruses or other similar
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impairments.
8. Confidentiality. Each Party acknowledges that Confidential Information
may be disclosed to the other Party during the course of this Agreement. Each
Party agrees that it will take reasonable steps, at least substantially
equivalent to the steps it takes to protect its own proprietary information,
during the term of this Agreement, and for a period of three years following
expiration or termination of this Agreement, to prevent the duplication or
disclosure of Confidential Information of the other Party, other than by or to
its employees or agents who must have access to such Confidential Information
to perform such Party's obligations hereunder, who will each agree to comply
with this section. Notwithstanding the foregoing, either Party may issue a
press release or other disclosure containing Confidential Information without
the consent of the other Party, to the extent such disclosure is required by
law, rule, regulation or government or court order. In such event, the
disclosing Party will provide at least five (5) business days prior written
notice of such proposed disclosure to the other Party. Further, in the event
such disclosure is required of either Party under the laws, rules or
regulations of the Securities and Exchange Commission or any other applicable
governing body, such Party will (i) redact mutually agreed-upon portions of
this Agreement to the fullest extent permitted under applicable laws, rules and
regulations and (ii) submit a request to such governing body that such portions
and other provisions of this Agreement receive confidential treatment under the
laws, rules and regulations of the Securities and Exchange Commission or
otherwise be held in the strictest confidence to the fullest extent permitted
under the laws, rules or regulations of any other applicable governing body.
9. Limitation of Liability; Disclaimer; Indemnification.
Liability. UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE LIABLE TO THE
OTHER PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY
DAMAGES (EVEN IF THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES), ARISING FROM BREACH OF THE AGREEMENT, THE SALE OF MP PRODUCTS, THE
FRAUDULENT PURCHASE OF MP PRODUCTS, THE USE OR INABILITY TO USE THE AOL NETWORK,
THE AOL SERVICE, AOL.COM OR THE AFFILIATED MP SITE, OR ARISING FROM ANY OTHER
PROVISION OF THIS AGREEMENT, SUCH AS, BUT NOT LIMITED TO, LOSS OF REVENUE OR
ANTICIPATED PROFITS OR LOST BUSINESS ("COLLECTIVELY, "DISCLAIMED DAMAGES");
PROVIDED THAT EACH PARTY WILL REMAIN LIABLE TO THE OTHER PARTY TO THE EXTENT ANY
DISCLAIMED DAMAGES ARE CLAIMED BY A THIRD PARTY AND ARE SUBJECT TO
INDEMNIFICATION PURSUANT TO SECTION 9.2. EXCEPT AS PROVIDED IN SECTION 9.2,
NEITHER PARTY WILL BE LIABLE TO THE OTHER PARTY FOR MORE THAN [*] PROVIDED THAT
EACH PARTY WILL REMAIN LIABLE FOR THE AGGREGATE AMOUNT OF ANY PAYMENT
OBLIGATIONS OWED TO THE OTHER PARTY PURSUANT TO SECTION 4.
9.1 No Additional Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, NEITHER PARTY MAKES ANY, AND EACH PARTY HEREBY SPECIFICALLY
DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE
AOL NETWORK, THE AOL SERVICE, AOL.COM, THE AFFILIATED MP SITE, ANY MP
INTERACTIVE SITE OR THE MP PRODUCTS INCLUDING ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND IMPLIED WARRANTIES
ARISING FROM COURSE OF DEALING OR COURSE OF PERFORMANCE. WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, AOL SPECIFICALLY DISCLAIMS ANY WARRANTY REGARDING
THE PROFITABILITY OF THE AFFILIATED MP SITE.
9.2 Indemnity. Except as limited above, either Party will defend, indemnify,
save and hold harmless the other Party and the officers, directors, agents,
affiliates, distributors, franchisees and employees of the other Party from any
and all third party claims, demands, liabilities, costs or expenses, including
reasonable attorneys' fees ("Liabilities"), resulting from the indemnifying
Party's material breach of any duty, representation, or warranty of this
Agreement, except where Liabilities result from the gross negligence or knowing
and willful misconduct of the other Party.
9.3 Claims. Each Party agrees to (i) promptly notify the other Party in
writing of any indemnifiable claim and give the other Party the opportunity to
defend or negotiate a settlement of such claim at such other Party's expense,
and (ii) cooperate fully with the other Party, at that other Party's expense,
in defending or settling such claim. Each Party reserves the right, at its own
expense, to assume the exclusive defense and control of any matter otherwise
subject to indemnification by the other Party hereunder, and in such event, the
other Party will have no further obligation to provide indemnification for such
matter hereunder.
9.4 Acknowledgment. AOL and MP each acknowledges that the provisions of this
Agreement were negotiated to reflect an informed, voluntary allocation between
them of all risks (both known and unknown) associated with the transactions
contemplated hereunder. The limitations and disclaimers related to warranties
and
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*CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
<PAGE> 34
liability contained in this Agreement are intended to limit the circumstances
and extent of liability. The provisions of this Section 9 will be enforceable
independent of and severable from any other enforceable or unenforceable
provision of this Agreement.
10 Solicitation of AOL Users. During the terms of this Agreement, and for the
two-year period following the expiration or termination of this Agreement,
neither MP nor its agents will use the AOL Network to (i) solicit, or
participate in the solicitation of AOL Users when that solicitation is for the
benefit of any entity which could reasonably be construed to be or become in
competition with AOL (other than with respect to the MP Products and the
Ancillary Products) or (ii) promote any services which could reasonably be
construed to be in competition with AOL including, but not limited to, services
available through the Internet. In addition, MP may not send AOL Users e-mail
communications promoting MP's Products through the AOL Network without a "Prior
Business Relationship." For purposes of this Agreement, a "Prior Business
Relationship" will mean that the AOL User has either (i) engaged in a
transaction with MP through the AOL Network or (ii) voluntarily provided
information to MP through a contest, registration, or other communication, which
included notice to the AOL User that the information provided by the AOL User
could result in an e-mail being sent to that AOL User by MP or its agents. A
Prior Business Relationship does not exist by virtue of an AOL User's visit to
an Affiliated MP Site (absent the elements above). More generally, MP will be
subject to any standard policies regarding e-mail distribution through the AOL
Network which AOL may implement.
11 Collection of User Information. MP is prohibited from collecting AOL Member
screennames or Prior Business Relationship e-mail addresses from public or
private areas of the AOL Network, except as specifically provided below. MP will
ensure that any survey, questionnaire or other means of collecting AOL Member
screennames or other AOL User e-mail addresses, names, addresses or other
identifying information ("User Information"), including, without limitation,
requests directed to specific AOL Member screennames or AOL User e-mail
addresses and automated methods of collecting such information (an "Information
Request") complies with (i) all applicable laws and regulations and (ii) any
privacy policies which have been issued by AOL in writing during the Term (the
"AOL Privacy Policies"). Each Information Request will clearly and conspicuously
specify to the AOL Users at issue the purpose for which User Information
collected through the Information Request will be used (the "Specified
Purpose").
12 Use of User Information. MP will restrict use of the User Information
collected through an Information Request to the Specified Purpose. In no event
will MP (i) provide User Information to any third party except to the extent
specifically (a) permitted under the AOL Privacy Policies or (b) authorized by
the members in questions), (ii) rent, sell or barter User Information in a
manner that identifies AOL Users as end-users of the AOL Service, AOL.com or the
AOL Network or (iv) otherwise use any User Information in contravention of
Section 10 above. Notwithstanding the foregoing, MP may disclose User
Information to its publishers and vendors for (a) registration purposes and (b)
in connection with specific fraud prevention measures, and in the case of AOL
Members who purchase MP Products from MP, MP will be entitled to use User
Information from such AOL Members as part of MP's aggregate list of Customers;
provided that MP's use does not in any way identify, promote or otherwise
disclose such User Information in a manner that identifies such AOL Members as
end-users of the AOL Service, AOL.com or the AOL Network. In addition, MP will
not use any User Information for any purpose (including any Specified Purpose)
not directly related to the business purpose of the Affiliated MP Site.
13 Excuse. Neither Party will be liable for, or be considered in breach of or
default under this Agreement on account of, any delay or failure to perform as
required by this Agreement as a result of any causes or conditions which are
beyond such Party's reasonable control and which such Party is unable to
overcome by the exercise of reasonable diligence.
14 Independent Contractors. The Parties to this Agreement are independent
contractors. Neither Party is an agent, representative or partner of the other
Party. Neither Party will have any right, power or authority to enter into any
agreement for or on behalf of, or incur any obligation or liability of, or to
otherwise bind, the Other Party. This Agreement will not be interpreted or
construed to create an association, agency, joint venture or partnership between
the Parties or to impose any liability attributable to such a relationship upon
either Party.
15 Notice. Any notice, approval, request, authorization, direction or other
communication under this Agreement will be given in writing and will be deemed
to have been delivered and given for all purposes on the delivery date if
delivered by electronic mail on the AOL Network to screenname
"[email protected]" or (i) on the delivery date if delivered personally to the
Party to whom the same is directed; (ii) one business day after deposit with a
commercial overnight carrier, with written verification of receipt, or (iii)
five business days after the mailing date, whether or not actually received, if
sent by U.S. mail, return receipt requested, postage and charges prepaid, or any
other means of rapid mail delivery for which a receipt is
33
<PAGE> 35
available, to the person(s) specified above at the address of the Party set
forth in the first paragraph of this Agreement. With respect to AOL, notice
shall be sent to the Senior Vice President of Business Affairs and the Deputy
General Counsel.
16 No Waiver. The failure of either Party to insist upon or enforce strict
performance by the other Party of any provision of this Agreement or to exercise
any right under this Agreement will not be construed as a waiver or
relinquishment to any extent of such Party's right to assert or rely upon any
such provision or right in that or any other instance; rather, the same will be
and remain in full force and effect.
17 Return of Information. Upon the expiration or termination of this
Agreement, each Party will, upon the written request of the other Party, return
or destroy (at the option of the Party receiving the request) all confidential
information, documents, manuals and other materials specified the other Party.
18 Survival. Section 4.8 of the Agreement and Sections 9 through 12 of this
Exhibit G, will survive the completion, expiration, termination or cancellation
of this Agreement.
19 Entire Agreement. This Agreement sets forth the entire agreement and
supersedes any and all prior agreements of the Parties with respect to the
transactions set forth herein. Neither Party will be bound by, and each Party
specifically objects to, any term, condition or other provision which is
different from or in addition to the provisions of this Agreement (whether or
not it would materially alter this Agreement) and which is proffered by the
other Party in any correspondence or other document, unless the Party to be
bound thereby specifically agrees to such provision in writing.
20 Amendment. No change, amendment or modification of any provision of this
Agreement will be valid unless set forth in a written instrument signed by the
Party subject to enforcement of such amendment, and in the case of AOL, by an
executive of at least the same standing to the executive who signed the
Agreement.
21 Further Assurances. Each Party will take such action (including, but not
limited to, the execution, acknowledgment and delivery of documents) as may
reasonably be requested by any other Party for the implementation or continuing
performance of this Agreement.
22 Assignment. Neither Party will assign this Agreement or any right, interest
or benefit under this Agrement without the prior written consent of the other
Party; provided that, in the event of a Party's sale, consolidation or merger,
the other Party's prior approval shall not be required. Subject to the
foregoing, this Agreement will be fully binding upon, inure to the benefit of
and be enforceable by the Parties hereto and their respective successors and
assigns.
23 Construction; Severability. In the event that any provision of this
Agreement conflicts with the law under which this Agreement is to be construed
or if any such provision is held invalid by a court with jurisdiction over the
Parties to this Agreement, (i) such provision will be deemed to be restated to
reflect as nearly as possible the original intentions of the Parties in
accordance with applicable law, and (ii) the remaining terms, provisions,
covenants and restrictions of this Agreement will remain in full force and
effect.
24 Remedies. Except where otherwise specified, the rights and remedies granted
to a Party under this Agreement are cumulative and in addition to, and not in
lieu of, any other rights or remedies which the Party may possess at law or in
equity; provided that, in connection with any dispute hereunder, MP will not be
entitled to offset any amounts that it claims to be due and payable from AOL
against amounts otherwise payable by MP to AOL.
25 Applicable Law; Jurisdiction. This Agreement will be interpreted, construed
and enforced in all respects in accordance with the laws of the Commonwealth of
Virginia except for its conflicts of laws principles. Each Party irrevocably
consents to the exclusive jurisdiction of the courts of the Commonwealth of
Virginia and the federal courts situated in the Commonwealth of Virginia, in
connection with any action to enforce the provisions of this Agreement, to
recover damages or other relief for breach or default under this Agreement, or
otherwise arising under or by reason of this Agreement.
26 Export Controls. Both Parties will adhere to all applicable laws,
regulations and rules relating to the export of technical data and will not
export or re-export any technical data, any products received from the other
Party or the direct product of such technical data to any proscribed country
listed in such applicable laws, regulations and rules unless properly
authorized.
27 Headings. The captions and headings used in this Agreement are inserted for
convenience only and will not affect the meaning or interpretation of this
Agreement.
28 Counterparts. This Agreement may be executed in counterparts, each of which
will be deemed an original and all of which together will constitute one and the
same document.
34
<PAGE> 1
EXHIBIT 10.15
Integrator Number: 3622
GOVERNMENT INTEGRATOR AGREEMENT
This Government Integrator Agreement ("Agreement") entered into this 5th
day of May, 1995 is between MICROSOFT CORPORATION ("MS") having its principal
place of business at One Microsoft Way, Redmond, WA 98052 and CYBERSOURCE
CORPORATION ("Government Integrator") having its principal place of business at
1050 Chestnut Street, Suite 201, Menlo Park, CA 94025. The parties hereby agree
as follows:
1. DEFINITIONS AND SCOPE
1.1 GOVERNMENT INTEGRATOR AGREEMENT
This Agreement contains the general terms and conditions applicable for the
sale and distribution of Products under the specific Government Integrator
Program Agreement(s) which are attached to this Agreement.
1.2 PROGRAM AGREEMENT
This Program Agreements identify the specific award (hereinafter referred to as
the "Program"), terms and conditions and special pricing that are unique to
that Program. The terms and conditions of this Agreement apply to each Program
Agreement entered into hereunder. In the event of a dispute between the terms of
this Agreement and the terms of a Program Agreement, the terms of the Program
Agreement shall control. The terms, conditions and pricing are unique to the
Program and are not interchangeable among other Programs under this Agreement
or under any other agreements between MS and the Government Integrator. The
Program Agreement for each Program will be incorporated herein as Exhibit A.
Each Program Agreement shall pertain only to the acquisition of certain
Products specified herein, and only on behalf of specified agencies of the
United States (U.S.) government ("Participating Agencies") which are identified
therein. Government Integrator shall not use Products internally or distribute
or otherwise transfer Products to any entity which owns, controls, is owned or
controlled by, or under common ownership or control with the Government
Integrator ("Government Integrator Affiliates") without the prior written
consent of MS. For the purposes of this Agreement, an entity is "controlled" by
another if that other company of legal entity, either directly or through its
control of another company or legal entity; (i) holds the majority of voting
rights in it; (ii) is a member of it and has the right to appoint or remove a
majority of its board of directors; or (iii) is a member of it and controls
alone or under an agreement with other shareholders or members, the majority of
the voting rights in it.
Subject to the obligations to issue Reports, as hereinafter defined, and to pay
for the Products, Government Integrator may make copies of the specific
Products identified in a given Program Agreement and shall only deliver such
copies to the applicable Participating Agencies under such Program Agreement.
All copies of the Products made pursuant to this Section shall be true and
complete copies, including all copyright and trademark notices. Government
Integrator shall not make any copies of the Products, other than those copies
that properly reported hereunder.
Microsoft Confidential -- Disclosure Prohibited
<PAGE> 2
Government Integrator's solicitation of new Programs shall be on such terms and
conditions as agreed to by the parties and will only become effective upon
signature of the Program Agreements by both parties. MS reserves the right to
accept or reject in its sole discretion any proposed Program Agreement.
1.3 PARTICIPATING AGENCIES
An agency of the U.S. government may become a "Participating Agency" after it
is identified as such in a Program Agreement. Government Integrator shall have
complete discretion to establish with each Participating Agency the pricing and
all other terms and conditions regarding Government Integrator's provision of
Products and their associated license rights to Government Integrator's
Participating Agencies provided that such terms are not in conflict with this
Agreement, the applicable Program Agreement or the License Agreement. The
negotiation of these terms between Government Integrator and its Participating
Agencies shall not be subject to approval or review by MS in any way.
1.4 Definitions
the following terms shall have the following definitions for purposes of this
Agreement.
"Government Integrator" is defined as the Government Integrator that
signed this Government Integrator Agreement.
"Effective Date" is defined as the date that this Agreement is signed
and accepted by MS.
"End User" is defined as the ultimate consumer of Product(s).
"Financial Statement" is defined as a Balance Sheet as of the last day
of the calendar quarter, and an Income Statement and Statement of Cash Flows
for the quarter and year-to-date, prepared in accordance with Generally
Accepted Accounting Principles ("GAAP"). Any deviation from GAAF in the
quarterly statements shall be clearly noted. These statements must be signed by
an officer of Government Integrator as being representative of the books and
accounts of Government Integrator.
"MS" shall mean Microsoft Corporation.
"Product(s)" is defined as the MS software as designated from time to
time by MS which may be reproduced pursuant to a given Program Agreement.
"Participating Agency(ies)" is defined as the specified agency(ies) of
the United States government that are authorized to license Products under the
Program.
"Program" is defined as the specific bid or award by a Participating
Agency in favor of Government Integrator.
"Integrator Number" is defined as the number assigned by MS to a given
Government Integrator Agreement.
"Program Agreement Number" is defined as the number assigned by MS to a
given Program Agreement.
""Program Agreement" is defined as the Government Integrator Program
Agreement for a specific Program as agreed upon by MS and the Government
Integrator, which Program Agreement shall be in the form provided by MS. A
current copy of the form is attached hereto as Attachment A.
Microsoft 1965/1977 Channel Agreement
Government Integrator Agreement
2
<PAGE> 3
"Territory" is defined as the geographic boundaries of the United
States of America, and any OCONUS (outside the continental US) locations as may
be required for a Program.
2. TERMS OF AGREEMENT
[*]
3. PRICING SCHEDULES
Product prices for each Program are contained in each Program Agreement. The
pricing schedules applicable to a specific Program of Participating Agency may
not be interchanged among programs. All prices are exclusive of taxes, fees and
duties.
4. PAYMENT
4.1 PAYMENT TERMS
[*]
4.2 TAXES AND WITHHOLDINGS
(a) Sales Tax
[*]
(b) Withholding Taxes
[*]
[*] Certain confidential material on this page has been omitted and filed
separately with the Securities and Exchange Commission.
3
Microsoft 1965/1997 Channel Agreement
Government Integrator Agreement
<PAGE> 4
[*]
4.3 Credit Approval
[*]
5. REPORTING AND DOCUMENTATION
5.1 License Reporting
Government Integrator shall deliver to MS report information, via the format
attached hereto as Exhibit B ("Report Format"), or such other format as MS
shall specify from time to time in the future. Report information shall be
itemized for each Program and shall be itemized for each Participating Agency
under the Program. Such Report is due no later than the fifteenth (15th) day of
each calendar month. Each such Report shall be sent to the following addresses:
Microsoft Corporation Microsoft Corporation
Dept. 551, One Microsoft Way 5335 Wisconsin Avenue
Redmond, WA 98052-6399 Suite 600
Attn: Special Agreement Accounting Attn: [*]
Federal Contracts Manager
Following receipt of each such Report, MS shall invoice Government Integrator
and Government Integrator shall be obligated to pay MS the fees set forth in
the relevant Program Agreement for each unit indicated on the Report. The
Government Integrator's invoice address is identified in each Program Agreement.
5.2 Forecast Reporting
[*]
5.3 Documentation and Audit Verification
[*]
[*] Certain confidential material on this page has been omitted and filed
separately with the Securities and Exchange Commission.
4
Microsoft 1965/1997 Channel Agreements
Government Integrator Agreement
<PAGE> 5
determine if audit verification is necessary. Government Integrator shall not
unreasonably withhold such documentation. Any audit shall be performed by a
nationally recognized accounting firm. Any errors detected by such an audit
shall be promptly corrected by the Government Integrator and shall be promptly
reflected in a revised Report. At the request of MS, the Government Integrator
shall provide access to requested data. Any audit will be conducted during
Government Integrator's normal business hours, in such a manner as to not
unreasonably interfere with the Government Integrator's normal business
services.
6. MS OBLIGATIONS
6.1 Delivery of Master Copies And Updates/Upgrades.
After execution of a Program Agreement, MS will provide master copies of the
Products to be used by Government Integrator for purposes of replication and
distribution as required by a Program Agreement. The master copies may only be
for the Products specified in the given Program Agreement and distributed only
to the authorized Participating Agencies. The master copies may not be used by
the Government Integrator for its internal use or for any other purpose outside
of the program Agreement. From time to time during the term of this Agreement,
MS may provide Government Integrator with master copies containing upgraded
copies of the Products covered by a Program Agreement(s). Such master copies are
provided in order that Government Integrator may provide the Products and their
associated license rights to the named Participating Agency on such pricing and
payment terms and conditions as Government Integrator and the Participating
Agency agree.
6.2 MS Focal Point
For the duration of this Agreement, the MS focal point for matters are
identified below, MS will promptly notify the Government Integrator of any
changes to these focal points.
<TABLE>
<S> <C>
Technical: [*]
Address: Microsoft Corporation
5335 Wisconsin Avenue NW
Suite 600
Washington, DC 20015
Telephone Number: (202) 895-2028
Fax Number: (202) 364-8853
Administrative and Financial: Microsoft Corporation
Address: 5335 Wisconsin Avenue NW
Suite 600
Washington, DC 20015
Attn.: Federal Contract Manager
Telephone Number: (202) 895-2157
Fax Number: (202) 364-8853
</TABLE>
6.3 Product Support
The parties herein acknowledge and agree that any technical product support
shall only be obtained through membership by Government Integrator in the MS
Solution Provider Program. The TechNet CD and MSDN may be purchased separately
from MS.
7. Government Integrator Obligations
7.1 Government Integrator's Representations and Warranties
[*] Certain confidential material on this page has been omitted and filed
separately with the Securities and Exchange Commission.
<PAGE> 6
In a manner satisfactory to MS and at the Government Integrator's sole expense,
the Government Integrator hereby represents and warrants that:
(a) It will use its reasonable efforts to employ a competent and
aggressive sales and technical organization who shall be full
time employees of the Government Integrator to service and
support its Participating Agencies. Government Integrator will
promptly inform the MS Focal Points identified in Paragraph 6.2
of any difficulties it encounters in servicing its Participating
Agencies related to the Products:
(b) It shall employ at least one (1) MS Certified Product (MCP)
Specialist currently and at least two (2) MCPs within ninety
(90) days of entering into this Agreement. If Government
Integrator is a one person shop or has one technical person on
staff, only one (1) MCP is required.
(c) It will not alter in any way or form the Products.
(d) It will use its best efforts to comply with all of the terms of
this Agreement, and it will promptly inform MS of any known or
reasonably suspected violations by a Participating Agency of the
terms and conditions of the Program Agreement. Products and/or
applicable License Agreement.
(e) It will use its best efforts to comply with all of the terms of
this Agreement, and it will promptly inform MS of any known or
reasonably suspected violations by a Participating Agency of the
terms and conditions of the Program Agreement, Products and/or
applicable License Agreement.
(f) Integrator is required to provide a plan defining the method to
track duplication and distribution of all Product copies made
from the provided master copies. A plan is required within 30
days after execution of the Program Agreement to the Focal Point
designated in Paragraph 6.2 and shall be approved by MS prior to
the start of any replication. Approval shall not be unreasonably
withheld. Such plan shall include but not be limited to the
following:
(i) Procedures to insure the safe keeping of all master copies in
whatever media provided to the Government Integrator to prevent
unauthorized duplication.
(ii) Process(es) to track the number of duplications made to
the ultimate end users. Specific Product, quantities and
end users should be tracked.
(iii) Verification of the tracking records with the Report
furnished under Paragraphs 5.1 and 5.2 of Microsoft,
(iv) Corrective action plans where duplication and tracking
efforts are not in accordance with the terms of this
Agreement.
(v) Procedures and processes to monitor the installation of
Products by a third party subcontractor and verify
compliance by the third party subcontractor subcontractor
of the applicable terms of this Agreement.
Microsoft 1943/1997 Channel Agreement 6
Government Integrator Agreement
<PAGE> 7
7.3 NO OTHER PRODUCT WARRANTIES BY GOVERNMENT INTEGRATOR
Neither Government Integrator nor any of its employees or agents shall have any
right to make any other warranties or promises for the use of Products which
are not contained in the License Agreement. Government Integrator may, however,
make representations and give instructions for the use of the Products which
are contained in the License Agreement, or End User documentation provided with
the manual or M5 product literature denoted by a MS part number or authorized
in writing by MS.
7.3 PROGRAM ADMINISTRATOR
Government Integrator agrees to appoint focal points to serve as Government
Integrator's Program Administrator(s) under this Agreement. These focal points
may be for all of the Program Agreements or may be specific to a Program
Agreement. Specific focal points are identified in each Program Agreement.
Government Integrator agrees to promptly make the Program Administrator(s), as
well as Government Integrator's other sales employees, available for training
on he MS licensing policies related to such Products at such times and places
as MS reasonably requests. The individual(s) appointed by Government Integrator
as its Program Administrator(s) shall be an individual or individuals generally
knowledgeable on MS products. The Program Administrator(s) shall be responsible
for administering all of Government Integrator's requirements for Reporting to
MS, for general administration of Government Integrator's Participating
Agencies andf for working with the MS Account Manager (or local MS Contact) in
regard to any problems relevant to a given Participating Agency. Since the
functions of the Program Administrator(s) are technical and administrative in
nature, two or more individuals may be appointed to perform the functions of
the Program Administrator. Government Integrator shall provide MS with at least
ten (10) days advance written notice of any change in the individual(s) serving
as its Program Administrator(s).
Government Integrator's Program Administrator(s) shall be:
Technical: Ed Chen
Address: CyberSource Corporation
1050 Chestnut Street
Suite 201
Menlo Park, CA 94025
Telephone Number: 415-462-5650
Fax Number: 415-473-3066
Administrative KendallFargo
Address: CyberSource Corporation
1050 Chestnut Street
Suite 201
Menlo Park, CA 94025
Telephone Number: 415-462-5650
Fax Number: 415-473-3066
7
<PAGE> 8
8. LICENSE, TITLE AND TRADEMARK
8.1 LICENSE AGREEMENT
Government Integrator acknowledges that the Product(s) are distributed to the
Government Integrator and to the End User(s) subject to the terms of the
applicable MS License Agreement, which is attached as Exhibit A to the Program
Agreement, and shall become effective upon both parties' execution of a Program
Agreement. Government Integrator shall make commercially reasonable efforts to
prevent distribution of Product(s) to End Users who intend to copy or
reproduce the Product(s) in violation of the MS License Agreement. Government
Integrator shall use reasonable efforts to ensure that its employees are aware
and that each Participating Agency and end consumers using the Products
licensed to the Participating Agency are aware that the Products are licensed
from MS and may only be used subject to the terms and conditions contained in
the License Agreement. Before providing Products to any Participating Agency
hereunder, Government Integrator will: (i) provide to that Participating Agency
a copy of the sample License Agreement; and (ii) inform the Participating
Agency that the terms and conditions contained in the License Agreement will
apply to the Participating Agency's use of the licensed software. The
Government Integrator shall provide the Notice of Software Purchase and Notice
of Maintenance Purchase to all Participating Agencies and end users within he
Agencies with provision of the license or maintenance. These Notices are
contained in Exhibit B of the Program Agreement.
8.2 U. S. GOVERNMENT RESTRICTED RIGHTS
For solicitations issued before December 1, 1995 by the United States of
America, its agencies and/or instrumentalities (the "Government"), other than
the Department of Defense, the use, duplication or disclosure of the software
and documentation provided to the Government under this Agreement shall be
subject to the RESTRICTED RIGHTS as set forth in subparagraph (c)(1) and (2) of
the Rights in Technical Data and Computer Software clause at 48 CFR 52.227-19.
For solicitations issued before September 29, 1995 by the Department of
Defense, the use, duplication or disclosure of the software and documentation
provided under this Agreement shall be subject to the RESTRICTED RIGHTS as set
forth in subparagraphs (c)(1)(ii) of the Commercial Computer Software -
Restricted Rights clause at 48 CFR 252.227-7013. For solicitations issued by
the Government on or after December 1, 1995 and the Department of Defense on or
after September 29, 1995, the only rights provided in the software and
documentation provided herein shall be those contained in this Agreement.
Manufacturer is Microsoft Corporation, One Microsoft Way, Redmond, Washington
98052-6399.
8.3 USE OF TRADEMARKS
The appropriate trademark symbol (either "(TM)" of "(R)" in a superscript
following the Product name) shall be used whenever a Product name is first
mentioned, in any advertisement, brochure, or other material circulated or
displayed by Government Integrator. MS's current trademark list is available
upon request ("MS Marks" or "Marks"). Government Integrator shall not claim any
right in the trademarks, copyrights or trade names owned, used or claimed by
MS. Government Integrator shall not make any claim to the MS Marks or lodge any
filings with respect to such Marks, or Marks confusingly similar to the Marks,
whether on behalf of MS or in its own name or interest, without the prior
written consent of MS.
9. WARRANTY AND LIMITATION OF LIABILITY
(a) MS WARRANTS ITS SOFTWARE PRODUCT(S) TO END USERS AS
DEFINED IN THE WRITTEN LIMITED WARRANTY INCLUDED IN THE LICENSE AGREEMENT. ALL
REPLACEMENT PRODUCT IS DELIVERED SUBJECT TO THE TERMS OF THE MS LIMITED PRODUCT
WARRANTY. THE ABOVE LIMITED WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES,
8
<PAGE> 9
EXPRESS OR IMPLIED, OR STATUTORY, INCLUDING IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND OF ALL OTHER
OBLIGATIONS OR LIABILITIES ON MS' PART.
(b) NEITHER MS MOR ANYONE ELSE WHO HAS BEEN INVOLVED IN THE
CREATION, PRODUCTION, OR DELIVERY OF ANY PRODUCTS WHICH ARE THE SUBJECT OF THIS
AGREEMENT SHALL BE LIABLE FOR ANY INDIRECT, CONSEQUENTIAL OR INCIDENTAL DAMAGES
(INCLUDING DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION, LOSS OF
BUSINESS INFORMATION, AND THE LIKE) ARISING OUT OF THE USE OR INABILITY TO USE
ANY PRODUCT EVEN IF MS HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
(c) IN ANY CASE, THE LIABILITY OF MS (i) UNDER ANY PROVISION OF
THIS AGREEMENT; (ii) FOR ANY DAMAGES CAUSED BY A PROGRAM DEFECT OR FAILURE IN
ANY PRODUCT OR (iii) ARISING FROM A COURT OF PROPER JURISDICTION HOLDING ANY OF
THE ABOVE WARRANTIES OR DISCLAIMERS OF WARRANTIES INADEQUATE OR INVALID SHALL BE
LIMITED TO THE AMOUNT ACTUALLY PAID BY GOVERNMENT INTEGRATOR TO MS UNDER THIS
AGREEMENT. MS' LIMITATION OF LIABILITY IS CUMULATIVE WITH ALL OF MS'
EXPENDITURES BEING AGGREGATED TO DETERMINE SATISFACTION OF THE LIMIT. THE
EXISTENCE OF CLAIMS OR SUITS AGAINST MORE THAN ONE PRODUCT LICENSED UNDER THIS
AGREEMENT WILL NOT ENLARGE OR EXTEND THE LIMIT. GOVERNMENT INTEGRATOR RELEASES
MS FROM ALL OBLIGATIONS, LIABILITY, CLAIMS OR DEMANDS IN EXCESS OF THE
LIMITATION.
(d) MS shall defend and pay the amount of any final adverse
judgment against Government Integrator, or settlement to which MS has consented,
resulting from claims of infringement of any United States patent, copyright,
trademark and/or service mark with respect to a Product, provided that the
Product has not been altered, and provided further that MS is notified promptly
in writing of such a claim and has sole control over its defense or settlement,
and Government Integrator provides reasonable assistance in the defense of same.
10. TERMINATION
10.1 TERMINATION OF GOVERNMENT INTEGRATOR AGREEMENT
[*]
[*] Certain confidential material on this page has been omitted and filed
separately with the Securities and Exchange Commission.
<PAGE> 10
[*]
[*]
[*]
10.2 TERMINATION OF THE PROGRAM AGREEMENT
[*]
[*]
[*] Certain confidential material on this page has been omitted and filed
separately with the Securities and Exchange Commission.
10
Microsoft 1965/1997 Channel Agreement
Government Integrator Agreement
<PAGE> 11
[*]
10.3 ESSENTIAL ELEMENT
Both Government Integrator and MS acknowledge that this Agreement and its
attachments are essential to any agreement it enters into with a Participating
Agency. Except as is specifically provided herein related to Government
Integrator's right to collect any outstanding payment following termination of
this Agreement, Government Integrator's rights to acquire and/or distribute
Products, and to collect payment from its Participating Agencies, are
conditional upon this Agreement being in full force and effect. Government
Integrator acknowledges further that, if and when it is the subject of a
bankruptcy filing (under any Chapter of 11 United States Code Section 101 et
seq. including any future amendments), then assumption of any contract with a
Participating Agency is conditional upon the assumption of this Agreement.
11. CONFIDENTIALITY
11.1 TERMS AND CONDITIONS OF THE AGREEMENT
Government Integrator expressly undertakes to retain in confidence the terms and
conditions of this Agreement, and all executed Program Agreements that are made
available to Government Integrator, except to the extent such agreements and
forms are required to be disclosed by operation of statute or regulation, and
all information and know-how transmitted to Government Integrator by MS, and
Government Integrator agrees to make no use of such information and know-how
except under the terms and during the existence of this agreement. Should
Government Integrator disclose the terms and conditions of this Agreement or any
executed Program Agreement, except as required by statute, then this Agreement
shall immediately terminate. Government Integrator shall guarantee and ensure
its employees' compliance with this paragraph. Government Integrator's
obligations under this paragraph shall survive any termination of this Agreement
and shall extend to the earlier of such time as the information is in the public
domain or five (5) years following the termination of this Agreement.
12. NOTICES
All notices sent by MS or Government Integrator alleging, regarding, responding
to, or in any way connected with any claim of breach of this Agreement or any
other legal issues related hereto, shall be sent via U.S. certified mail (return
receipt requested), or via overnight courier (e.g., Federal Express, or DHL),
and addressed as follows:
if to MS: Microsoft Corporation
One Microsoft Way
Redmond, WA 98052-6399
Attn: Sr. Vice President, Microsoft North America
[*] Certain confidential material on this page has been omitted and filed
separately with the Securities and Exchange Commission.
11
<PAGE> 12
With cc to: Law and Corporate Affairs
With cc to: Microsoft Corporation
5335 Wisconsin Avenue NW
Suite 600
Washington, DC 20015
Attn: Contract Manager
If to Government Integrator:
CyberSource Corporation
1050 Chestnut Street
Suite 201
Menlo Park, CA 94025
Attn: William McKiernan, President
cc: Kendall Fargo, Gov. Account Mgr.
13. GOVERNMENT CLAUSES INCORPORATED BY REFERENCE
The following Federal Acquisition Regulation Clauses are incorporated by
reference into this Agreement:
52.222-26, Equal Opportunity
52.222-35, Affirmative Action for Special Disabled and Vietnam Era Veterans
52.222-36, Affirmative Action for Handicapped Workers
52.247-64, Preference for Privately Owned U.S.-Flagged Commercial Vessels (For
Agreements Entered into Prior to May 1, 1996.)
14. DELAY IN PERFORMANCE
Neither party shall be liable for failure or delay in the performance of any of
its obligations under this Agreement, except obligations for the payment of
money, if such delay or failure is caused by circumstances beyond the reasonable
control of the party affected. Strikes or other labor difficulties which are not
capable of being terminated on terms acceptable to the party affected shall not
be considered circumstances within the control of such party. In the event of
Product shortages, MS shall have the right to allocate available supplies of the
Products in its sole discretion.
15. NO WAIVER
None of the provisions of this Agreement shall be deemed to have been waived by
any act of acquiescence on the part of MS, Government Integrator or their
respective agents or employees, but may be waived only by an instrument in
writing signed by an authorized officer of the waiving party. No waiver of any
provision of this Agreement shall constitute a waiver of any other provision or
of the same provision on another occasion.
12
<PAGE> 13
16. NO PARTNERSHIP OR AGENCY
Nothing in this Agreement shall be deemed to create or constitute a partnership,
joint venture, franchise, agency, or contract of employment between MS and
Government Integrator.
17. ATTORNEY'S FEES; GOVERNING LAW
In the event an action is commenced to enforce a party's rights under this
Agreement, the prevailing party in such action shall be entitled to recover its
costs and attorney's fees. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of Washington. Government Integrator
consents to non-exclusive jurisdiction and venue in King County, Washington.
18. EXPORT LAW COMPLIANCE
Government Integrator acknowledges that the transfer of the Products is subject
to the export control laws and regulations of the United States of America, and
any amendments thereof, which include, but are not limited to, the following:
Restricted Countries: Cuba, Federal Republic of Yugoslavia (Serbia and
Montenegro), Iran, Iraq, Libya, North Korea, South Africa (military
and police entities only), Syria and Vietnam.
Restricted End-Users: Any End-User whom Government Integrator knows or
has reason to know will use Products or Direct MS Products in the
design, development, or production of missiles and missile technology,
nuclear weapons and weapons technology, or chemical and biological
weapons.
Restricted End-Users: Any use of Products and Direct MS Products
related to the design, development, or production of missiles and
missile technology, nuclear weapons and weapons technology, or
chemical and biological weapons.
These restrictions change from time to time. If Government Integrator has any
questions regarding its obligations under United States of America export
regulations, Government Integrator should contact the Bureau of Export
Administration, United States Department of Commerce, Office of Export
Licensing, Washington D.C., USA (202) 337-4811.
19. NON ASSIGNMENT
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, provided that Government
Integrator may not assign its rights or obligations under this Agreement in any
way without the prior written consent of MS. MS consent shall not be
unreasonably withheld. MS may freely assign its interests in this Agreement,
provided, however, that the party to which MS' interest will be assigned must
assume all of MS obligations and responsibilities hereunder.
Microsoft 1965/1997 Channel Agreement 13
Government Integrator Agreement
<PAGE> 14
20. PUBLICITY
Government Integrator shall not advertise or otherwise disclose or publish
information which includes any reference to MS or its Products without first
obtaining MS' prior written consent. MS agrees that such consent shall not be
unreasonably withheld.
21. SURVIVAL
Paragraphs 4.1, 4.2, 5.3, 7.2, 7.3, 8, 9, 10 and 11 shall survive the expiration
of this Agreement.
22. ENTIRE AGREEMENT
This Agreement and all attached Amendments, Addenda and Schedules, and any
Program Agreements entered into in connection herewith, constitute the entire
agreement between MS and Government Integrator, and supersede and terminate any
and all prior agreements or contracts, written or oral, entered into between
the parties relating to the subject matter hereof. Any representations,
promises, or conditions in connection therewith not in writing signed by both
parties shall not be binding upon either party. This Agreement shall control
any provisions in purchase orders which are inconsistent with this Agreement.
IN WITNESS WHEREOF, the parties have signed this Agreement on the date
indicated below. All terms and conditions of the Agreement not supplemented
herein shall remain in full force and effect. This Agreement is not binding
until executed by MS.
MICROSOFT CORPORATION ("MS") CYBERSOURCE CORPORATION
("Government Integrator")
By: /s/ [*] By: /s/ WILLIAM S. McKIERNAN
----------------------------- ------------------------------
[*] William S. McKiernan
----------------------------- ------------------------------
Name (please print) Name (please print)
Federal Contracts Manager President and CEO
----------------------------- ------------------------------
Title Title
5/6/96 5/13/96
----------------------------- ------------------------------
Effective Date Date
ATTACHMENTS:
A. Program Agreement(s)
B. Report Format
[*] Certain confidential material on this page has been omitted and filed
separately with the Securities and Exchange Commission.
14
<PAGE> 15
20. PUBLICITY
Government Integrator shall not advertise or otherwise disclose or publish
information which includes any reference to MS or its Products without first
obtaining MS' prior written consent. MS agrees that such consent shall not be
unreasonably withheld.
21. SURVIVAL
Paragraphs 4.1, 4.2, 5.3, 7.2, 7.3, 8, 9, 10 and 11 shall survive the expiration
of this Agreement.
22. ENTIRE AGREEMENT
This Agreement and all attached Amendments, Addenda and Schedules, and any
Program Agreements entered into in connection herewith, constitute the entire
agreement between MS and Government Integrator, and supersede and terminate any
and all prior agreements or contract, written or oral, entered into between the
parties relating to the subject matter hereof. Any representations, promises, or
conditions in connection therewith not in writing signed by both parties shall
not be binding upon either party. This Agreement shall control any provisions in
purchase orders which are inconsistent with this Agreement.
IN WITNESS WHEREOF, the parties have signed this Agreement on the date indicated
below. All terms and conditions of the Agreement not supplemented herein shall
remain in full force and effect. This Agreement is not binding until executed by
MS.
MICROSOFT CORPORATION ("MS") CYBERSOURCE CORPORATION
("Government Integrator")
By: /s/ [*] By: /s/ W. S. McKiernan
------------------- --------------------
[*] W. S. McKiernan
------------------- --------------------
Name (please print) Name (please print)
Federal Contracts Manager President & CEO
-------------------------- --------------------
Title Title
5/6/96 5/13/96
------------------- --------------------
Effective Date Date
ATTACHMENTS:
A. Program Agreement(s)
B. Report Format
[*] Certain confidential material on this page has been omitted and filed
separately with the Securities and Exchange Commission.
Microsoft 1965/1997 Channel Agreement 14
Government Integrator Agreement
<PAGE> 16
[MICROSOFT LETTERHEAD]
June 11, 1997
Kendall Fargo
CyberSource
550 South Winchester Boulevard, Suite 301
San Jose, CA 95128
Subject: Signed Program Agreement
Dear Mr. Fargo:
Enclosed is a signed copy of Program Agreement 3852-0001 for your files.
Should you have any questions, please call me at (202)895-2157.
Sincerely,
Microsoft Corporation
/s/ [*]
[*]
Federal Contracts Manager
Enclosure
[*] Certain confidential material on this page has been omitted and filed
separately with the Securities and Exchange Commission.
<PAGE> 17
ATTACHMENT A
PROGRAM AGREEMENT
Program Agreement Number 3852-0001
This Microsoft Government Integrator Program Agreement (this "Program
Agreement") is between MICROSOFT CORPORATION ("MS") and CYBERSOURCE identified
below. MS and Government Integrator have previously entered into that certain
Government Integrator Agreement dated April 26, 1996 (the "Agreement"), the
terms of which are hereby incorporated by reference. Notwithstanding the
foregoing, in the event of a conflict between the terms of this Program
Agreement and the terms of the Agreement, the terms of this Program Agreement
shall control. Unless otherwise defined herein, all capitalized terms shall
have the same meaning as set forth in the Agreement.
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------
Name of Government Integrator (Entry Name): Names of Participating Agency and Program
CyberSource Corporation Office Address
- ------------------------------------------------
Address (specify street address and/or post
office box, city, state/and postal code): Defense Logistic Agency and the DOD
Procurement Offices
550 S. Winchester Blvd.
Suite 301
San Jose, CA 95128
- ------------------------------------------------
Telephone Number:
(408)260-6016
- ------------------------------------------------
Facsimile Number:
(408) 241-8270
- ------------------------------------------------
Attention:
Kendall Fargo
- ------------------------------------------------------------------------------------------------
</TABLE>
1. Limited Scope. During the term of this Program Agreement, and in
accordance with all of its terms and conditions, the Government Integrator may
obtain, on behalf of certain agencies of the United States' government, as
identified above (the "Participating Agencies"), licenses for certain Microsoft
Products at specified prices, solely in connection with the solicitation
identified at the bottom of this Section 1. A copy of the current License
Agreement that will run from MS to the Participating Agency is attached hereto
as Exhibit A. The Government Integrator may not order or acquire Licenses under
this Program Agreement for itself or for any other person or entity that is not
covered by the identified solicitation. Government Integrator shall be
authorized to purchase documentation SKUs) from a MS authorized replicator and
to resell these documentation SKUs directly to Government Integrator's
Participating Agencies. MS's current list of the names of authorized
replicators is available upon request.
- --------------------------------------------------------------------------------
Award Date: Solicitation Description:
June 9, 1997 Contract Number : N00140-97-D-1756
- --------------------------------------------------------------------------------
2. Term. [*]
[*] Certain confidential material on this page has been omitted and filed
separately with the Securities and Exchange Commission.
<PAGE> 18
3. Participating Agencies. An agency of the United States government may
become a "Participating Agency" after it is identified as such in this Program
Agreement. MS reserves the right to refuse to accept any Program Agreement
which is incomplete, not accompanied by all information requested by MS as
necessary to process Program Agreement, or submitted for an entity that MS
deems is not covered by the solicitation identified in Section 1 above.
4. Designation of Account Contacts. The following persons are appointed as
the primary account contacts with respect to this Program Agreement). Either
party may change its appointed contact upon notice to the other party. The name
and address of the appointed Microsoft Account Contact is also named below.
<TABLE>
<S> <C>
- -----------------------------------------------------------------------------------------------------------
Name and title of Government Integrator Account Contact: Name and title of Microsoft Account Contact:
Contracts: Kendall Fargo Contractual/Financial - [*]
Program Manager: William McKiernan
Technical Manager: Ed Chen
- -----------------------------------------------------------------------------------------------------------
Address (if different from above): Address:
Microsoft Corporation
CyberSource Corporation 5335 Wisconsin Avenue
550 S. Winchester Blvd. Suite 600
Suite 301 Washington, DC 20015
San Jose, CA 95128
- -----------------------------------------------------------------------------------------------------------
Telephone Number: Telephone Number:
Kendall Fargo (408) 260-6016 [*]
William McKiernan (408) 260-6004
Ed Chen (408) 260-6007
- -----------------------------------------------------------------------------------------------------------
Facsimile Number: Facsimile Number:
Kendall Fargo (408) 241-8270 (202) 365-8853
William McKiernan (408) 241-8270
Ed Chen (408) 241-8270
- -----------------------------------------------------------------------------------------------------------
Internet Address: Internet Address:
[email protected] [*]
- -----------------------------------------------------------------------------------------------------------
Invoice Address: Accounts Receivable
Blake Burke Microsoft Corporation
550 S. Winchester Blvd. Special Agreements - Dept 551
Suite 301 Redmond, WA 98052
San Jose, CA 95128 Attention: [*]
(408) 260-6013 Fax: 206-936-5401
fax: 408-241-8270 Voice: 206-[*]
- -----------------------------------------------------------------------------------------------------------
</TABLE>
5. Products and Price Levels
a. Products. The list and prices of Products to be acquired by all
Participating Agencies during the term of this Program Agreement are set forth
below.
Exhibit C identifies the pricing for this effort.
[*] Certain confidential material on this page has been omitted and filed
separately with the Securities and Exchange Commission.
<PAGE> 19
These product licenses will be offered at these stated prices for as long as
these products are commercially available. That is, when revisions to products
become commercially available, only the latest version of a product license
will be commercially available; multiple versions of any product will not be
available simultaneously. Prices for newer versions of product licenses will be
negotiable.
6. Special Terms: Each agency identified under this contract shall be
reported as separate agencies. The specific agency level of detail is
identified in Exhibit E.
7. MS Ship-to Address for CD Shipment. All CD-ROM disk sets are to be
delivered to the address set forth below:
Name of Government Integrator (Entity Name):
CyberSource Corporation
Address (specify street address and/or post office box, city, state/and postal
code):
550 S. Winehester Blvd.
Suite 301
San Jose, CA 95128
Telephone Number:
(408) 260-6016
Facsimile Number:
(408) 241-8270
Attention:
Kendall Fargo
8. Entire Agreement: This Program Agreement and any License Agreements
related thereto, together with the Agreement, constitute the entire
agreement between the Government Integrator and MS concerning the subject
matter thereof and supersede any prior Microsoft Select (Government or
otherwise) agreement between the parties relating to the acquisition of
Licenses relating to the solicitation/bid identified in Section 1 above.
The terms and conditions of these documents shall control over any
provisions in any purchase order. Any representations, promises or
conditions in connection therewith not in writing signed by all affected
parties shall not be binding. The provisions of this Program Agreement
and/or License Agreements may be changed only by a written instrument
signed by both parties.
<PAGE> 20
This Program Agreement is not legally binding until executed by both
parties.
MICROSOFT CORPORATION ("MS") CYBERSOURCE CORPORATION
("Government Integrator")
By: /s/ [*] By: /s/ KENDALL M. FARGO
---------------------------- --------------------------
[*] Kendall M. Fargo
- ------------------------------- -----------------------------
Name (please print) Name (please print)
Federal Contract Manager Government Sales Manager
- ------------------------------- -----------------------------
Title Title
June 10, 1997 June 9, 1997
- ------------------------------- -----------------------------
Date Date
EXHIBITS
(A) License Agreement
(B) Notice of Software Purchase, Notice of Maintenance Purchase
(C) Price List
[*] Certain confidential material on this page has been omitted and filed
separately with the Securities and Exchange Commission.
<PAGE> 21
Exhibit A
LICENSE AGREEMENT-PRODUCT USE RIGHTS
For the purposes of interpreting these Product Use Rights, the term "Software"
shall mean the software portion of the Select Software Products. For Licenses
ordered under an Outsourcer Enrollment Agreement, all references in these
Product Use Rights to "Licensee" shall be deemed to be references to the Lead
Customer or the Lead Customer Affiliate to which the Licensee has rented,
leased, or otherwise provided the Software, rather than to the Licensee itself.
I. Application Products - For products which are classified as in the Select
Product List as belonging to the Application Product Pool, the following apply:
A. For application products not otherwise identified below, the following
Section is applicable. For each License required, Licensee may use one copy of
the Software on a single computer. The primary user of the computer on which a
copy of the Software is installed may make a second copy for his or her
exclusive use on a portable computer.
B. For Microsoft(R) Office 7.0, Microsoft(R) Office Professional 7.0,
Microsoft(R) Excel 7.0, Microsoft(R) Word 7.0, Microsoft(R) PowerPoint(R) 7.0,
Microsoft(R) Schedule+ 7.0, Microsoft(R) Access 7.0, Microsoft(R) Publisher 3.0,
Microsoft(R) Works 4.0, Microsoft(R) Project 4.1, and Microsoft(R) FrontPage(TM)
1.10 and prior versions of these products, the following section is applicable
For each License acquired, Licensee may use one copy of the Software on a single
computer. The primary user of a computer on which a copy of the Software is
installed may make a second copy for his or her exclusive use on either a home
or portable computer.
C. For Microsoft(R) Mail Remote Client and Schedule+ Starter Kit, the following
Section is applicable For each License acquired, Licensee may use Software
designated as Server software on a single computer system (i.e., a network
server) and may use Software designated as Workstation software on a single
computer or workstation. If any licensed copy of the Workstation software is
permanently installed on the hard disk or other storage device of a computer
(other than a network server) and one person uses that computer more than 80% of
the time it is in use, then that person may also use the Workstation software on
a portable computer.
D. For multimedia CD-ROM products, the following section is applicable
(1) Single Computer Use For each License acquired, Licensee may use one
copy of the Software on a single computer. Once Licensee has run that portion
of the Software called the "setup" program on a computer, Licensee may use that
copy of the Software on a different computer only if Licensee first deletes the
files installed by the setup program from the first computer. Licensee may not
copy the software from the CD-ROM to a computer hard disk or other permanent
electronic storage device (except as occurs when Licensee runs the setup program
or uses the other features of the Software on a single computer).
(2) Computer Network Use If, rather than use a single computer, Licensee
wishes to use the Software over a computer network, Licensee may do so as
follows: (a) Licensee may install the setup/install program on any or all
computers on Licensee's network, and (b) Licensee may make the Software
available over Licensee's network either by a CD-ROM drive connected to a
network server or by installing the entire Software on the hard disk of a
network server, provided that (c) Licensee has metering software in place to
restrict the number of concurrent users of the Software (i.e., the total number
of users accessing the Software over the network at any one time) to the number
of licenses Licensee has acquired for the Software (either licenses for CD-ROM
copies or Microsoft License Paks). Note that if Licensee has multiple copies of
the Software in CD-ROM form and is counting such copies as licenses for
<PAGE> 22
Licensee's use of the Software over a computer network, Licensee may archive
such CD-ROM copies and not make any other use of them for as long as Licensee is
counting them as network copies.
E. For application products enrolled in Upgrade Advantage Plus, the following
additional rights are applicable At any time, Licensee may have as many copies
of the Software in use as Licensee has Licenses enrolled in Upgrade Advantage
Plus, as long as Licensee has metering software in place to ensure that the
number of persons using the Software concurrently does not exceed the number of
Licenses enrolled in Upgrade Advantage Plus. A License for the Software may not
be shared or used concurrently on computers located in different time zones, or
by a user who is neither an employee of Licensee nor an independent contractor
providing services to Licensee of the type that are customarily performed by
Licensee's employees. The primary user of a computer on which a copy of the
Software is installed or which runs the Software from a storage device used only
to install or run the Software on Licensee's computers over an internal network
may make a second copy for his or her exclusive use on a portable computer;
provided that: (x) the total number of second copies made by Licensee's users
may not exceed the number of Licenses acquired by Licensee; (Y) the number of
second copies made by users of computers on which copies of the Software are not
installed may not exceed the number of Licenses enrolled by Licensee in Upgrade
Advantage Plus; and (z) Licensee must maintain records that enable Licensee to
determine that it is in compliance with the limitations expressed in clauses (x)
and (y) above.
F. For Microsoft(R) Visual Basic(R), the following section is applicable For
each License it acquires, Licensee may designate one individual within
Licensee's organization who will have the personal, nonexclusive license to use
copies of the Software, which includes "on-line" or electronic documents, for
the sole purpose of designing, developing, and testing Licensee's software
product(s) that are designed to operate in conjunction with any Microsoft
operating system product. Each designated individual may install copies of the
Software on an unlimited number of computers provided that such individual is
the only person who uses each such copy of the Software.
Licensee may use and modify the source code version of those portions of the
Software designated as "Sample Code" ("SAMPLE CODE") for the sole purposes of
designing, developing, and testing Licensee's software product(s), and to
reproduce and distribute the SAMPLE CODE, along with any modifications thereof,
only in object code form provided that Licensee complies with subsection (M)
below.
Licensee is granted a nonexclusive royalty-free right to reproduce and
distribute the object code version of any portion of the Software listed in the
software file README.HLP. or, for versions prior to Visual Basic 4.0, in the
software file SWDEPEND.TXT (collectively, "REDISTRIBUTABLES"), provided Licensee
complies with subsection (M).
G. For Microsoft(R) Visual C++(R), Microsoft(R) Visual J++(R), and Microsoft(R)
Visual FaxPro(R) Professional, the following section is applicable For each
License acquired, Licensee may use one copy of the Software on a single
computer. Installation on a network server for the sole purpose of internal
distribution to one or more other computer(s) owned by Licensee shall not
constitute "use" for which a separate license is required, provided Licensee has
a separate license for each computer to which the Software is distributed.
Solely with respect to electronic documents, if any, included with the Software,
Licensee may make an unlimited number of copies (either in hard copy or
electronic form), provided that such copies shall be used only for internal
purposes and are not republished or distributed to any third party.
H. For Microsoft Visual C++, the following additional section is applicable If
Licensee has acquired the Software as part of a subscription package, then it
must treat as an upgrade any subsequent versions of the Software received as an
update to its subscription package. Without prejudice to any other rights
provided herein, Microsoft may terminate this License if Licensee fails to
<PAGE> 23
comply with the terms and conditions hereof. In such event. Licensee must
destroy all copies of the Software.
Licensor grants Licensee the right to use and modify the source code version of
those portions of the Software which are identified in the documentation as the
Sample Code and located in the MSVC15\SAMPLES, MSVC15\MFC\SAMPLES on the
Microsoft Visual C++ version 1.52 CD-ROM and MSDEV\SAMPLES on the Microsoft
Visual C++ version 4.0 CD-ROM subdirectories ("SAMPLE CODE") and the Microsoft
Foundation Classes ("MFC"), provided Licensee complies with subsection (M).
Licensee may not distribute the SAMPLE CODE or MFC, or any modified version of
the SAMPLE CODE or MFC, in source code form.
Licensor grants Licensee a nonexclusive right to reproduce and distribute the
object code version of those portions of the Software designated in the Software
as: (I) REDISTRB.WRI located in MSVC15\REDIST on the "Microsoft Visual C++
version 1.52" CD-ROM, and MSDEV\REDIST, and WIN32S\REDIST subdirectories on the
"Microsoft Visual C++ version 4.0" CD-ROM; (II) those portions of the Software
on the "Microsoft Visual C++ version 1.52" CD-ROM which are identified in the
documentations as the VBX Controls ("VBX"), (III) SAMPLE CODE, and (IV) MFC
(collectively, "REDISTRIBUTABLES"), provided Licensee complies with subsection
(M) (and subsection (L), if applicable).
I. FOR MICROSOFT J++, THE FOLLOWING ADDITIONAL SECTION IS APPLICABLE
Licensor grants Licensee the right to use and modify the source code version of
those portions of the Software which are identified in the documentation as the
Sample Code and located in the MSDe\Samples subdirectories on the "Microsoft
visual 1++ version 1.00" CD-ROM (the "SAMPLE CODE"), provided Licensee complies
with subsection (M). Licensee may not distribute the SAMPLE CODE, or any
modified version of the SAMPLE CODE, in source code form.
Licensor grants Licensee a nonexclusive, royalty-free right to reproduce and
distribute the object code version of those portions of the Software designated
in the Software as: (i) the files identified in the REDISTRB,WR1 file located
in the MSDev\Redist subdirectory on the "Microsoft Visual J++ version 1.00"
CD-ROM; and (ii) SAMPLE CODE (collectively, "REDISTRIBUTABLES"), provided
Licensee complies with subsection (M) (and subsection (L) if applicable).
NOTE ON JAVA SUPPORT. The Software product may contain support for programs
written in Java. Java technology is not fault tolerant and is not designed,
manufactured or intended for use or resale as online control equipment in
hazardous environments requiring fail-safe performance, such as in the operation
of nuclear facilities, aircraft navigation or communications systems, air
traffic control, direct life support machines, or weapons systems, in which the
failure of Java technology could lead directly to death, personal injury, or
severe physical or environmental damage.
J. FOR MICROSOFT VISUAL FOXPRO PROFESSIONAL, THE FOLLOWING ADDITIONAL SECTION
IS APPLICABLE
With respect to Microsoft Visual FoxPro Professional, Licensor grants Licensee a
royalty-free right to reproduce and distribute the run-time modules of the
Software (collectively, "REDISTRIBUTABLES"), provided that Licensee complies
with subsection (M). The "run-time modules" are those files in the Software
that are identified in the Software documentation as required during execution
of Licensee's software program. The run-time modules are limited to run-time
files, install files and ISAM and REBUILD files.
K. FOR MICROSOFT(R) VISUAL SOURCESAFE(TM), THE FOLLOWING SECTION IS APPLICABLE
For each License it has acquired, Licensee may designate one individual within
Licensee's organization who will have the personal, nonexclusive license to make
and use copies of the Software for the sole purposes of managing, designing,
developing, and testing Licensee's software product(s). Each designated
individual may install copies of the Software on an unlimited number of
computers provided that such individual is the only individual using the
Software.
<PAGE> 24
L. FOR MICROSOFT VISUAL BASIC, MICROSOFT VISUAL C++ AND MICROSOFT J++, THE
FOLLOWING ADDITIONAL SECTION IS APPLICABLE
Unless Licensee's software product requires Licensee's customers to license
Microsoft(R) Office for Windows(R), or a component of it in order to operate,
Licensee may not reproduce or use any of the files comprising the Microsoft(R)
Access database engine ("JET"), i.e., the files named MSAJT200.DLL,
MSJT3032.DLL, MSRD2X32.DLL, MSJTER32.DLL, MSJINT32.DLL, DAO2516.DLL and
DAO3032.DLL for commercial distribution in conjunction with a general purpose
word processing, spreadsheet, or database management software product, or an
integrated work or product suite whose components include a general purpose word
processing, spreadsheet, or database management software product except for the
exclusive use of importing or exporting data to the various formats supported by
JET and included in Licensee's software product (e.g., reading data from and
writing data to a single data source at one time). Note: a product which
includes limited word processing, spreadsheet, or database components along with
other components which provide significant and primary value, such as an
accounting product with limited spreadsheet capability, is not considered to be
a "general purpose" product.
M. FOR ALL APPLICATION TOOLS PRODUCTS IDENTIFIED IN SUBSECTIONS F THROUGH L
ABOVE, THE FOLLOWING ADDITIONAL SECTION IS APPLICABLE
If Licensee redistributes the SAMPLE CODE or REDISTRIBUTAL SOFTWARE
(collectively, "REDISTRIBUTABLES"), Licensee agrees to: (I) distribute the
REDISTRIBUTABLES in object code only in conjunction with and as a part of a
software application product developed by Licensee which adds significant and
primary functionality to the Software and which is developed to operate on the
Microsoft(R) Windows(R) or Microsoft(R) Windows NT(R) environment; (II) not use
Licensor's name, logo, or trademarks to market Licensee's software application
product; (III) include a valid copyright notice on Licensee's application
software product; (IV) indemnify, hold harmless, and defend Licensor and its
subsidiaries from and against any claims or lawsuits, including attorney's fees,
that arise or result from the use or distribution of Licensee's software
product; (V) not permit further distribution of the REDISTRIBUTABLES by
Licensee's end-users. The license in this section to distribute the
REDISTRIBUTABLES is royalty-free provided that Licensee's software application
product is developed for operation in the Windows or Windows NT environment.
Contact Licensor for the applicable royalties due and other licensing terms for
all other uses and/or distribution of REDISTRIBUTABLES. The REDISTRIBUTABLES
are provided "as is" and without warranty of any kind.
II. System Products - For products which are classified in the Select Product
List as belonging to the System Products Pool, the following apply:
A. FOR SYSTEM PRODUCTS NOT OTHERWISE IDEMNIFIED BELOW, THE FOLLOWING SECTION
IS APPLICABLE
For each License it has acquired, Licensee may install and use one copy of the
Software on the single computer on which it was first installed. If the
Software includes a functionality that enables Licensee's single computer to
act as a network server, any number of computers or workstations may access or
otherwise utilize the basic network services of that server; however, Licensee
must acquire and dedicate a License for each separate computer on which the
Software is installed or run from the server. A License to use the Software
may not be shared or used concurrently on different computers.
The Software may contain technology that enables applications to be shared
between two or more computers, even if an application is installed on only one
of the computers. Licensee may use this technology, if it is included in the
Software, with all Microsoft products for multi-party conferences. For
non-Microsoft applications, Licensee should consult the accompanying license
agreement or contact the Licensor to determine whether application sharing is
permitted by the Licensor.
<PAGE> 25
NOTE ON JAVA SUPPORT. The Software may contain support for programs written in
Java. Java technology is not fault tolerant and is not designed, manufactured,
or intended for use or resale as on-line control equipment in hazardous
environment requiring fail-safe performance, such as in the operation of
nuclear facilities, aircraft navigation or communication systems, air traffic
control, direct life support machines, or weapons systems, in which the failure
of Java technology could lead directly to death, personal injury, or severe
physical or environmental damage.
B. FOR MICROSOFT(R) WINDOWS NT(R) WORKSTATION, THE FOLLOWING ADDITIONAL SECTION
IS ALSO APPLICABLE
The Software may not be more than two(2) processors at any one time on the
single computer on which it is running. Licenses may install the Software on a
single computer ("Workstation Computer") for use as interactive workstation
software, but not as a server software. However, Licensee may permit a maximum
of ten (10) computers to connect to the Workstation Computer to access and use
services of the Software, such as file and print services and peer web
services. The ten connection maximum includes any indirect connections made
through software or hardware which pools or aggregates connections.
FOR WINDOWS 95 USERS, THE FOLLOWING ADDITIONAL SECTION IS ALSO APPLICABLE
A customer must have one of these products to be eligible to install the
Windows 95 Upgrade under maintenance:
o Windows 95
o Windows 3.0, 3.1, 3.11
o Windows for Workgroups 3.10, 3.11
o Windows NT (all versions)
o OS/2 (Version 2.0 and higher)
III. Server Products -- For products which are classified in the Select Product
List as belonging to the Server Products Pool the following applies:
A. FOR SERVER PRODUCTS NOT OTHERWISE IDENTIFIED BELOW, THE FOLLOWING SECTIONS
ARE APPLICABLE
1. GRANT OF LICENSE. This Microsoft product contains some or all of the
following types of software: "Server Software" that provides services on a
computer called a server, "Connector Software" that enables a computer running
Microsoft Exchange Server to communicate with other Servers running Microsoft
Exchange Server or other electronic mail server software, and "Client Software"
that allows a computer, personal digital assistant, pager, "smart phone", or
other digital electronic device or workstation to access or utilize the
services provided by the Server Software. Microsoft grants to Licensee the
following rights to the Server Software, the Connector Software (if provided),
and the Client Software:
(a) Installation. Licensee may install the Server Software and the Connector
Software for use with only one microprocessor architecture (e.g., the X86
architecture or various RISC architectures) at any given time. Server Software.
For each server License acquired, Licensee may install one copy of the Server
Software on a single computer (the computer running the Server Software shall
be referred to as the "Server"). Connector Software. For each License acquired,
Licenses may install one copy of the Connector Software on one Server running
Microsoft Exchange Server. If Licensee chooses to install Connector Software on
a Server running Microsoft Exchange Server, Licensee must also acquire a
separate license or licenses to install and/or use the Connector Software on
every other Server running Microsoft Exchange Server in the same "Microsoft
Exchange Organization". A "Microsoft Exchange Organization" is the group of all
Microsoft Exchange Servers with the same organization name specified during the
Microsoft Exchange Server installation process for the express purpose of
connecting the servers. Licensee may install the Client Software on any computer
or workstation.
(b) Use Of The Server Software. Licensee may use one copy of the Server
Software on one Server, which may be connected at any point in time to an
unlimited number of workstations or computers operating on one or more
networks. Licensee must acquire a separate Client Access License to access or
otherwise utilize the services of the Server, whether Licensee uses the Client
Software, third-party software, or
<PAGE> 26
an application Licensee develops to do so, unless otherwise noted in Section 2
of these server product license provisions. Each Client Access License must be
dedicated to one unique computer or workstation. It permits that computer or
workstation to access or utilize the services of any Server. This is known as
using the Server Software in "Per Seat Mode." However, Licensee may elect to
use the Server Software for Microsoft SQL Server, Windows NT Server, Microsoft
Exchange Server, or SNA Server (but not Microsoft BackOffice or Systems
Management Server) in "Per Server Mode" as defined below. If Licensee chooses
Per Seat Mode, Licensee's choice is permanent. If Licensee initially chooses
Per Server Mode, Licensee has the right to change one time only to Per Seat
Mode, as long as Licensee acquires a Client Access License for each unique
workstation or computer accessing or utilizing the services of a Server.
(c) Alternate Terms If Licensee Elects To Use The Server Software For Microsoft
SOL Server, Windows NT Server, Microsoft Exchange Server, or SNA Server In Per
Server Mode. In Per Server Mode, the maximum number of computers or
workstations that may access or otherwise utilize the services of the Server at
a given point in time is equal to the number of Client Access Licenses that
Licensee has acquired and designated for use exclusively with that Server.
Licensee may access any Server running in the Per Server Mode by using any
Microsoft or third-party client software, including computers or workstations
licensed in Per Seat Mode, provided the additional access is within the
Server's maximum licensed capacity of simultaneously connected computers or
workstations. If Licensee elects to change from Per Server Mode to Per Seat
Mode, Licensee may transfer any Client Access Licenses it acquired for use in
Per Server Mode to an equal number of workstations of computers in Per Seat
Mode.
(d) Use Of The Connector Software. Licensee may use the Connector Software on
one Microsoft Exchange Server.
(e) Use Of The Client Software. Licensee may use the Client Software to
configure and administer the Server. If Licensee uses the Client Software to
access or otherwise utilize the services of the Server or for any other
purpose, Licensee must acquire a separate Client Access License unless
otherwise noted in Section 2 below.
(f) No "Multiplexing" Or "Pooling". Use of software or hardware that reduces
the number of users directly accessing or utilizing the Server Software
(sometimes called "multplexing" or "pooling" software or hardware) does not
reduce the number of Client Access Licenses required -- the required number
of Client Access Licenses would equal the number of distinct inputs to the
multiplexing or pooling software or hardware "front end."
2. DESCRIPTION OF OTHER RIGHTS AND LIMITATIONS.
(a) For Microsoft Windows NT Server -- Processor Limitations. The Server
Software may be used by no more than four (4) processors of the Server at
any one time (support for greater than four processors is available from
authorized computer hardware vendors). Client Access. Licensee needs a
separate Client Access License for Windows NT Server in order to access or
otherwise utilize the following Windows NT Server basic network service.
File Services (sharing and managing files and/or disk storage), Printing
Services (sharing and managing printers), and Remote Access Service
(accessing the server from a remote location through a communications link).
Licensee does not need a separate Client Access License for Windows NT Server
to access or otherwise utilize any other Windows NT Server services, to access
or run Microsoft or third-party server applications on Windows NT Server, or
to otherwise use the Client Software.
(b) For Microsoft SQL Server -- Client Access. Licensee does not need a
separate Client Access License for SQL Server in order to execute SQL Server-
to-SQL Server remote stored procedures (also referred to as database remote
procedure calls). Benchmark testing. Licensee may not disclose the results of
any benchmark test of either the Server Software or Client Software to any
third part without Microsoft's prior written approval. Note regarding the use of
run-time software. Microsoft hereby grants to Licensee a limited nonexclusive,
royalty-free right to reproduce and distribute those DB-Library, Net-Library,
and ODBC files required for run-time execution of complied applications
("Run-Time Files") in conjunction with and as a part of Licensee's application
software product that is created using the Microsoft SQL Server Software
("Application"), provided that Licensee complies with the Distribution
Requirements listed below.
(c) For Microsoft Exchange Server. Schedule+, the Forms Designer and Sample
Applications provided in Microsoft Exchange Server may only be installed and
used in conjunction with the Microsoft Exchange
<PAGE> 27
Client Software. Client Access. Licensee needs to acquire a separate Client
Access License for Microsoft Exchange Server in order to use Microsoft Exchange
Client Software to access and otherwise utilize Microsoft Exchange Server and
to access or otherwise utilize the services of any other electronic mail server
software. Note regarding the use of the Forms Designer and Sample
Applications. The Forms Designer and its components may only be used to create
applications which utilize the services of Microsoft Exchange Server
("Application"). Microsoft grants Licensee the following non-exclusive rights:
(i) to reproduce and distribute the run-time modules of the Forms Designer in
conjunction with Licensee's Application; (ii) to reproduce, customize and
distribute the run-time modules of the Sample Applications in conjunction with
Licensee's Application; and (iii) to use and modify the source code version of
the Sample Applications and to reproduce and distribute the object code version
of such modifications in conjunction with Licensee's Application. Any
distribution permitted under this Section must be in compliance with the
Distribution Requirements listed below. For purposes of this Section,
"run-time modules" are those files identified in the written materials
accompanying Microsoft Exchange Server as required during the execution of
Licensee's software product. Source Extractor and Microsoft Mall Connector,
Microsoft Exchange Server also includes Source Extractor software. The Source
Extractor and Microsoft Mail Connector programs contain components which may be
installed on additional machines. Microsoft grants Licensee the additional
right to modify the source code version of the Source Extractor programs. The
Source Extractor programs may only be used to migrate data to Microsoft
Exchange Server.
(d) For Microsoft Proxy Server. Licensee may install and use Microsoft Proxy
Server for its use or (for entities') use within Licensee's organization on any
Server running Windows NT Server and Internet Information Server. Licensee
does not need a separate Client Access License for any computer or workstation
to access or otherwise utilize the services of Microsoft Proxy Server.
Benchmark Testing. You may not disclose the results of any benchmark test of
either the Server Software or Client Software to any third party without
Microsoft's prior written approval.
(e) For Microsoft Transaction Server. Licensee may install and use Microsoft
Transaction Server for its use or (for entities') use within Licensee's
organization on any Server running Windows NT Server. Licensee does not need a
separate Client Access License for any computer or workstation to access or
otherwise utilize the services of Microsoft Transaction separately.
(f) For Microsoft SNA Server. The 3270 and 5250 terminal evaluation applies
and the ODBC/DFDA driver provided with SNA Server are licensed for use only by
one user per licensed SNA Server. Licenses for additional users must be
acquired separately.
(g) For Microsoft Systems Management Server. Licenses must acquire at least
one valid Server License for Microsoft SQL Server to use Systems Management
Server. However, Licenses does not need to acquire a Client Access License for
Microsoft SQL Server to use the administrative console or utilities provided
with Systems Management Server to access or otherwise utilize the services of
Microsoft SQL Server.
(h) Distribution Requirements For Microsoft SQL Server and Microsoft Exchange
Run Time Files And Sample Applications. If License distributes Microsoft SQL
Server Run Time Files, run time modules for the Forms Designer or Sample
Applications, or object code versions of the Sample Applications (collectively
"Redistributables") as provided above, Licenses agrees to (i) distribute the
Redistributables only in conjunction with and as a part of Licensee's
Application; (ii) nor use Microsoft's name, logo, or trademarks to market
Licensee's Application; (iii) include a valid copyright notice in Licensee's
Application; (iv) distribute all ODBC components specified in the READ ME file
in conjunction with Licensee's Application if Licensee's software product
contains ODBC files, (v) include an end user license agreement with Licensee's
Application that grants a limited license to use the Redistributables and
otherwise protects Microsoft's its affiliates' and its suppliers intellectual
property rights in the Redistributables; and (vi) indemnify, hold harmless, and
defend Microsoft, its affiliates and its suppliers from and against any claims
or lawsuit, including attorneys' fees that arise or result from the use or
distribution of Licensee's Application. License shall display any patent or
proprietary rights notices on each copy of its Application(s) that contains
executables or run-time modules, if and as required in the documentation or
other materials provided with Microsoft SQL Server, Forms Designer or Sample
Applications, or subsequently provided to Licensee by Microsoft.
<PAGE> 28
NOTE ON JAVA SUPPORT. The Software may contain support for programs written in
Java. Java technology is not fault tolerant and is not designed, manufactured,
or intended for use or resale as online control equipment in hazardous
environments requiring full-safe performance, such as in the operation of
nuclear facilities, aircraft navigation or communication systems, air traffic
control, direct life support machines, or weapons systems, in which the failure
of Java technology could lead directly to death, personal injury, or
severe physical or environmental damage.
B. FOR MICROSOFT(R) MERCHANT SERVER, THE FOLLOWING SECTIONS ARE APPLICABLE
1. GRANT OF LICENSE.
Server Software. Licensee may install and use one copy of the Server Software
on a single computer (the "Server"), which may be connected at any point in
time to an unlimited number of workstations or computers operating on one or
more networks. Licensee must acquire a separate Administrative Access License
for each store Licensee administers. A "state" shall mean an application which
is or has one or more of the following: (i) a uniquely branded web page or
pages offering goods or services; (ii) a unique database scheme; (iii) a unique
listing in the system registry of the Server; or (iv) a unique administration
password. Licensee "administers" a store when it creates, configures or
maintains a store, including any underlying database, in whole or in part,
either by using the Server directly or by using a remote workstation and
irrespective of whether Licensee used Microsoft browser or client software,
third-party software, third-party software or application Licensee develops.
Sample Code. Licensee may modify the Sample Code to design, develop, and test
Licensee's store(s). For the purposes of this action, "Sample Code" shall mean
the sample source and HTML code located in the Server Software's "SDK" and
"stores" directories, excluding the product images and descriptions contained
in the sample stores which are provided solely as examples and may not be used
with Licensee's store(s).
Redistributable Code. Parties of the Server Software are designated as
"Redistributable Code." The next file located in\doe\redist.txt, describes the
distribution rights associated with each file of the Redistributable Code.
2. DESCRIPTION OF OTHER RIGHTS AND LIMITATIONS.
(a) No "Multiplexing" or "Pooling." Use of software or hardware that reduces
the number of users directly administering a particular store at any time
(sometimes called "multiplexing" or "pooling" software or hardware) does not
reduce the number of Administrative Access Licenses required - the required
number of Administrative Access Licenses would equal the number of distinct
inputs to the multiplexing or pooling software or hardware "front end."
(b) vPOS Software. The Server Software includes vPOS software from VedFone,
Inc. Licensee may only use the vPOS software in connection with Licensee's use
of the Server Software. In no event, shall VeriFone, Inc. or its suppliers be
liable for any direct, special, incidental, indirect, or consequential damages
whatsoever.
(c) Tax Components. The tax components shipped with the Server Software are
provided only for use evaluation and testing purposes. As such, they are not
meant for a production environment. A tax component suitable for production use
can be obtained from independent tax providers.
NOTE ON JAVA SUPPORT. The Software may contain support for programs written in
Java. Java technology is not fault tolerant and is not designed, manufactured,
or intended for use of resale as on-line control equipment is hazardous
environments requiring fail-sade performance, such as in the operation of
nuclear facilities, aircraft navigation or communication systems, air traffic
control, direct life support machines, or weapons systems, in which the failure
of Java technology could lead directly to death, personal injury, or severe
physical or environmental damages.
C. FOR CLIENT ACCESS PRODUCTS NOT OTHERWISE IDENTIFIED BELOW, THE FOLLOWING
SECTIONS ARE APPLICABLE
1. GRANT OF LICENSE.
(a) Overview Of The Use Of The Client Access License. This Section C describes
Licensee's rights to access or otherwise utilize the services of the Server
Software. The services of the Server are considered to be accessed or utilized
when there is a direct or indirect connection between a computer or workstation
and a Server. Each Client Access Licenses must be dedicated to one unique
computer or workstations. It permits that computer or workstation to access or
otherwise utilize the services of any Server. This is known as using the Server
Software in "Per Seat Mode."
(b) Note Regarding The Use Of The Client Access Licenses For Microsoft(R)
Backoffice. The Client Access License for Microsoft(R) BackOffice may only be
used in the Per Seat Mode. Each Client Access
<PAGE> 29
License in the Per Seat Mode entitles Licensee to access or utilize the
services of any computer running any Server Software, whether licensed as part
of Microsoft(R) BackOffice or acquired separately.
2. DESCRIPTION OF OTHER RIGHTS AND LIMITATIONS.
(a) No "Multiplying" or "Pooling". "Multiplexing" or "pooling" software or
hardware does not reduce the number of Client Access Licenses required-the
required number of Client Access Licenses would equal the number of distinct
imports to the multiplexing or pooling software or hardware "front end."
3. UPGRADE.
If Licensee is upgrading from SNA Server version 2.0, Licensee is deemed to
have Client Access Licenses for as many computers or workstations as were
previously licensed. If Licensee is upgrading from Windows NT(R) version 3.1,
Licenses is deemed to have twenty (20) users that qualify for upgrade Client
Access Licenses and if Licensee is upgrading from Windows NT(R) Advanced Server
version 3.1, Licenses is deemed to have two hundred fifty (250) users that
qualify for upgrade Client Access Licenses. NOTE: Upgrading from Windows NT(R)
Server 3.5 to Windows NT(R) Server 3.51 is not considered an "Upgrade" for
purposes of this Section.
D. For Microsoft(R) Merchant Server Administrative Access License, the
Following sections are applicable
1. GRANT OF LICENSE.
This Section D describes Licensee's right to administer one unique store using
the Server Software. A single computer running the Server Software shall be
referred to as the "Server." A "store" shall mean an application which is or
has one or more of the following: (i) a uniquely branded web page or pages
offering goods or services; (ii) a unique database schema; (iii) a unique
listing in the system registry of the Server; or (iv) a unique administration
password. Licensee "administers" a store when Licensee creates, configures or
maintains a store, including its underlying database, in whole or in part,
either by using the Server directly or by using a remote workstation and
irrespective of whether Licensee uses Microsoft browser or client software,
third-party software or an application Licensee develops. The Administrative
Access License must be dedicated to a particular store; it may not be used for
or shared among multiple stores. The Administrative Access License need not be
dedicated to a particular individual or a unique computer or workstation,
however, it does not be dedicated to a particular individual or a unique
computer or workstation, however, it does not permit more than one individual,
compact or workstation to administer a store at any one time. For a second
individual, computer or workstation to administer a store at the same time,
Licensee must acquire a second Administrative Access License.
2. DESCRIPTION OF OTHER RIGHTS AND LIMITATIONS.
(a) Use of Software. Licensee's use of the Server Software is subject to the
terms and conditions of Microsoft End User License Agreement provided with the
Server Software.
(b) No "Multiplexing" or "Pooling". Use of software or hardware that reduces
the number of users directly administering a particular store at any one time
(sometimes called "multiplexing" or "pooling" software or hardware) does not
reduce the number of Administrative Access Licenses required - the required
number of Administrative Access Licenses would equal the number of distinct
inputs to the multiplexing or pooling software or hardware "front end."
E. For Microsoft(R) Mail Gateway Server Software, the following section is
applicable
Each copy of the Software may be used on a computer system connected to a
single terminal (i.e. a single CPU) acting as a Microsoft(R) Mail Gateway
computer as described in the user documentation for such Software. If the
Software includes software designated as Gateway Access, Gateway PostOffice,
and/or Message Service software, Licensee may use, for each copy of the
Software, such portion(s) of the Software on a CPU's which is acting as a
Microsoft(R) Mail "postoffice" as described in the user documentation for such
Software.
F. For Microsoft(R) Services for NetWare, the Following section is applicable
This Microsoft product is comprised of two components: File & Print Services
for NetWare and Directory Service Manager for NetWare (collectively,"Software").
The Software contains software that provides services on a computer called a
"server"(Server Software"), and software that allows a computer or
<PAGE> 30
workstation to access or otherwise utilize the services provided by the Server
Software ("Client Software"), Microsoft grants to Licensee the following rights
to the Server Software and the Client Software:
o Software Installation and Use. Licensee may install one copy of the
Server Software on a single computer (the computer running the Server
Software shall be referred to as the "Server"). Licensee may install the
Client Software on any one or more computers or workstations connected to
the Server. Licensee may install the Server Software and the Connector
Software for use with only one microprocessor architecture (e.g., the X86
architecture or various RISC architectures) at any given time. Licensee is
only licensed to use the Software compatible with the version of Windows
NT Server installed on the Server during the installation of the Software.
o For File & Print Services for NetWare. If Licensee has already acquired a
Client Access License for Windows NT Server to access or otherwise utilize
the basic services of the Server, that Client Access License gives
Licensee the right to access and utilize the Server Software. If not,
Licensee needs a separate Client Access License for Windows NT Server for
each computer or workstation that will be accessing or otherwise utilizing
the services of the Server. Refer to the Server License for Microsoft
Windows NT Server for more information.
o For Directory Service Manager for NetWare. Licensee does not need a
separate Client Access License for Windows NT Server to access or
otherwise utilize the Server Software.
IV. Other Clauses
1. Restrictions. All copies of Software made or used are subject to the
following restrictions:
a. Copyright. All title and copyrights in and to the Software
(including but not limited to any images, photographs, animations, video, audio,
music, text, and "applets," incorporated into the Software), the accompanying
printed materials, and any copies of the Software, are owned by Licensor or its
suppliers. The Software is protected by United States copyright laws and
international treaty provisions. Therefore, Licensee must treat the Software
like any other copyrighted material. Licensee may not copy any guides,
manuals, or other printed materials describing or explaining the Software. All
that is granted to Licensee is a right to use the Software as set forth above.
b. Rental Restrictions. Licensee may not rent or lease any copy of
the Software.
c. Reverse Engineering. Licensee may not reverse engineer,
decompile, or disassemble any of the Software, except and only to the extent
that such activity is expressly permitted by applicable law notwithstanding
this limitation.
d. Separation of Components. All Software, including Software
consisting of several components, is licensed as a single product. Its
component parts may not be separated for use on more than one computer.
e. Transfer Restrictions.
(i) Select Program Rights. Without the written consent of
Licensor, Licensee may not transfer the rights granted pursuant to
this License Agreement to any third party other than pursuant to a
merger, consolidation or other corporate/organizational divestitors
or acquisition. Licensee may not sublicense or otherwise transfer
Licenses on a short-term basis.
(ii) Licensed Copies.
(A) Without the written consent of Licensor, Licensee
may not transfer the rights granted herein to third parties other
than pursuant to a merger, consolidation, or other corporate/
organizational divestiture or acquisition. Licensee may not transfer
such rights to any party unless Licensee transfers all of the
Software (including all component parts, the media and
<PAGE> 31
printed materials, any upgrades and, if applicable, the Certificate of
Authenticity) and the recipient agrees to the terms of this License
Agreement. If the Software is an upgrade, any transfer must include
all prior versions of the Software. Licensee may not sublicense or
otherwise transfer Licenses on a short-term basis.
(B) With respect to Windows(TM) 95,
Windows(TM)NT Workstation, and successor versions of those products,
Licensee may not transfer any License unless such transfer is in
accordance with the provisions of Paragraph 2(e)(ii)(A) above, and, in
addition, is part of a sale or transfer of the single computer system
where the Software was first installed.
f. Upgrades. If the Software is an upgrade from another product,
whether from Licensor or another supplier, Licensee must have a valid license
for the qualifying product that is being upgraded for the Software upgrade
licenses to be valid, and the upgraded product must be used to replace such
qualifying product. Licensee may use or transfer the product that has been
upgraded only in conjunction with that upgraded Software, unless Licensee
destroys the upgraded product. If the Software is an upgrade of ana Microsoft
product, Licensee may use that upgraded product only in accordance with this
License Agreement. If the Software is an upgrade of a component of a package
of software programs which Licensee licensed as a single product, the Software
may be used and transferred only as part of that single product package and
may not be separated for use on more than one computer.
g. Upgrade Advantage:
Maintenance includes "version upgrades" and "successor or upgrade products"
meaning any "major product upgrade" (e.g., 1.0 to 2.0), "minor product upgrade"
(e.g., version 2.01 to 2.01a) for such Products, which have been made generally
available prior to expiration of the Program Agreement. Windows 95 is
considered a successor to Windows 3.1 and Windows 3.11. Successor or upgrade
products do not include any existing or future product which are not a direct
successor to the Product such as extensions, add-on's and accessory products
marketed separately from the Product. For example, Microsoft(TM)Word for
Windows(TM) & Bookshelf(TM) is not a direct successor to Microsoft(TM)Word.
Further. Windows NT is a successor to earlier versions of Windows NT, but
Windows NT 3.5 is NOT a successor to Windows 3.1 or Windows 95. Competitive
upgrades from non-Microsoft products except as noted above, and pre-released or
"beta" version software products are not included. If an upgrade product is
jointly packaged with one or more additional products, such upgrade will only
be included if the product is not separately available in Licensee's area.
For Application Products, successor or upgrade products shall include any
platform upgrade which is the substitution of the Software which runs on one
operating environment (e.g., Apple(TM) Macintosh(TM) for the same or similar
software product which runs on a different operating environment (e.g.,
Microsoft(TM) Windows(TM) or MS-DOS(TM); provided the Software for the new
operating environment has a Version Upgrade price equal to or lower than the
version to be substituted. When available, 32-bit versions of the Product
shall be considered successor products of the 16-bit versions of this Product.
The Product need not be upgraded within its original operating environment
before it can be switched to another operating environment. Successor or
upgrade products shall include the substitution of Software in one natural or
spoken language(e.g., Word for Windows(TM) in French) for the same or similar
software product which is available in a different language (e.g., Word for
Windows(TM) in English), provided that the Software in the new language has a
maintenance price equal to or lower than the language version to be substituted.
Once upgraded, the Product in all its language versions shall be considered a
single product, and may not be separated for use on more than one computer or
by more than one user at any time.
All maintenance end at the end of your prime contact regardless of any
remaining time.
h. Export Restrictions. All Products and related user documentation
are subject to the export control laws and regulations of the United States.
As used in this paragraph, the term "Controlled Material"
<PAGE> 32
means: (1) any Products or related documentation and technical data, and (ii)
any software developed by Licensee using one or more Products. Nothing in the
proceeding sentence shall be construed to grant Licensee any right to use any
Product in any manner or for any purpose not expressly permitted in the
applicable grant provision above. Licensee agrees that nether Licensee nor its
customers intend to or will, directly or indirectly: (1) export or transmit any
Controlled Material to any country to which such export or transmission is
restricted by any applicable U.S. regulation or statute (currently including,
but not limited to Cuba, the Federal Republic of Yugoslavia (Serbia and
Montenegro, U.N. Protected Areas and areas of Republic of Bosnia and Heregovia
under the control of Bosnian Serb forces), Iran, Iraq, Libya, North Korea, and
Syria), without the prior written consent, if required, of the Bureau of Export
Administration of the U.S. Department of Commerce, or such other governmental
entity as may have jurisdiction over such export or transmission; or (ii)
provide any Controlled Material in any manner to any end-user whom Licensee or
its customer knows or has reason to know will utilize them in the design,
development or production of nuclear, chemical or biological weapons.
2. Limited Warranty. Licensor warrants that the Software will perform
substantially in accordance with the applicable user documentation published by
Licensor for a period of 90 days from the date of receipt of the disk or other
media carrier. any implied warranties on the Software are limited to 90 days.
Some states/jurisdictions do not allow limitations on duration of an implied
warranty, so the above limitation may not apply.
3. Licensee Remedies. Licensor's entire liability and Licensee's exclusive
remedy shall be, at Licensor's option, either (a) return of the price paid or
(b) repair or replacement of the Software that does not meet Licensor's Limited
Warranty. The Limited Warranty is void if failure of the Software has resolved
from accident, abuse or misapplication. Any replacement Software will be
warranted for the remainder of the original warranty period or 30 days,
whichever is longer.
4. No Other Warranties. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW,
LICENSOR DISCLAIMS ALL OTHER WARRANTIES, EITHER EXPRESS OR IMPLIED, INCLUDING
BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, WITH RESPECT TO THE SOFTWARE, THE RELATED PRODUCT MANUALS(S)
AND WRITTEN MATERIALS, AND ANY ACCOMPANYING HARDWARE THE LIMITED WARRANTY GIVES
LICENSEE SPECIFIC LEGAL RIGHTS. LICENSEE MAY HAVE OTHERS WHICH VARY FORM
STATE/JURISDICTION TO STATE/JURISDICTION.
5. No Liability for Consequential Damages. TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LAW, IN NO EVENT SHALL LICENSOR OR ITS SUPPLIERS BE LIABLE FOR ANY
OTHER DAMAGES WHATSOEVER (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF
BUSINESS PROFITS, BUSINESS INTERRUPTION, LOSS OF BUSINESS INFORMATION, OR OTHER
PECUNIARY LOSS) ARISING OUT OF THE USE OF OR INABILITY TO USE THE SOFTWARE,
EVEN IF LICENSOR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN ANY
CASE, LICENSOR'S ENTIRE LIABILITY UNDER ANY PROVISION OF THIS LICENSE AGREEMENT
SHALL BE LIMITED TO THE AMOUNT ACTUALLY PAID BY LICENSEE FOR THE SOFTWARE.
BECAUSE SOME STATES/JURISDICTIONS DO NOT ALLOW THE EXCLUSION OR LIMITATION OF
LIABILITY FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES, THE ABOVE LIMITATION MAY NOT
APPLY TO LICENSEE.
6. Termination. The terms of this License Agreement shall survive termination of
the Program Agreement to which it relates, and Licensee shall be entitled to
continue to use the copies of Software for which Licensee has valid Licensee in
accordance with the terms of this License Agreement.
<PAGE> 33
EXHIBIT B
NOTICE OF SOFTWARE PURCHASE
OF MICROSOFT(R) SOFTWARE PRODUCTS
This Notice of Software Purchase identifies the products provided to you as the
end user under the Agreement identified below. This document is not a software
license. Your invoice from the Government Integrator, Microsoft's License
Agreement and this document is your proof of purchase for your Microsoft
software product(s) and should be retained with your permanent records.
Date:
---------------------------------------------------------------------------
Products:
-----------------------------------------------------------------------
Quantity:
-----------------------------------------------------------------------
Prime Contract:
-----------------------------------------------------------------
Prime Contract Number:
----------------------------------------------------------
Microsoft Government Integrator Agreement Number:
-------------------------------
Government Integrator Name:
-----------------------------------------------------
Address:
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Phone: Fax:
----------------------- ------------------------------------
End User Customer Name:
---------------------------------------------------------
Address:
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Phone: Fax:
----------------------- ------------------------------------
<PAGE> 34
EXHIBIT B
NOTICE OF VERSION AND PRODUCT UPGRADES (MAINTENANCE)
PURCHASE
FOR MICROSOFT(R) SOFTWARE PRODUCTS
This Notice of Version and Product Upgrades Purchase identifies the products
provided to you as the end user under the Agreement identified below. This
document is not a software license. Your invoice from the Government Integrator,
Microsoft's License Agreement and this document is your proof of purchase for
your Microsoft software product(s) and should be retained with your permanent
records.
Date:
---------------------------------------------------------------------------
Products:
-----------------------------------------------------------------------
Quantity:
-----------------------------------------------------------------------
Prime Contract:
-----------------------------------------------------------------
Prime Contract Number:
----------------------------------------------------------
Microsoft Government Integrator Agreement Number:
-------------------------------
Government Integrator Name:
-----------------------------------------------------
Address:
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Phone: Fax:
----------------------- ------------------------------------
End User Customer Name:
---------------------------------------------------------
Address:
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Phone: Fax:
----------------------- ------------------------------------
<PAGE> 35
Exhibit C
PRICING AND TERMS
[*]
[*] Certain confidential material on this page has been omitted and filed
separately with the Securities and Exchange Commission.
<PAGE> 36
[*]
[*] Certain confidential material on this page has been omitted and filed
separately with the Securities and Exchange Commission.
<PAGE> 37
PAYMENT:
[*]
DOCUMENTATION:
CyberSource shall used the following Microsoft Government Authorized
Replicators to purchase media including diskette and documentation. CyberSource
or the Government are not authorized to replicate the documentation. The
following are the Microsoft Government Authorized Replicators for the
specified products:
The following Microsoft Products are available only from the Authorized
Replicators listed directly below the products:
Office 97
Word
Excel
PowerPoint
Access
Back Office - Win NT Server, SQL Server, SMS, SNA Server, Exchange Server
Win NT 3.51 and 4.0 plus and any service packs that are released
Win NT Server 3.51 and 4.0 and any service packs that are released
Windows 95 Upgrade
Windows 3.1
Windows for Workgroups 3.11
MS-DOS 6.22 Update
Authorized Replicators for these products only:
IPC SOFTWARE SERVICES CUSTOM PRINT COMPANY
501 Colonial Drive 1005 Commercial Drive
St. Joseph, MI 49085 Owensville, MO 65066
Contact: Paula Hunt Contact: Ronal Cooper
Tel: (616)983-7105 Tel: 573-437-4161
Fax: (616)983-5736 Fax: 573-437-2785
All other products not listed above are only available from:
Microsoft Word-Wide Fulfillment
Tel: 800-248-0655
All of the pricing issued to CyberSource, which is described as license pricing,
is based on a requirement that product documentation be provided with each
product license (unless evidence is furnished which shows that documentation is
not required by the end user), and further, that the distribution of
documentation shall not exceed a one-to-one ratio of software/license and
documentation. Documentation must be distributed to the customer unless the
customer explicitly asks for software without documentation. CyberSource shall
ensure that documentation distribution never exceeds this one-to-one ratio, and
further, that it is only provided to users who have purchased the
software/license under any resulting agreement.
[*] Certain confidential material on this page has been omitted and filed
separately with the Securities and Exchange Commission.
<PAGE> 38
ADDITIONAL DOCUMENTATION:
Microsoft Press offers additional documentation including Getting Started
guides, Step-by-Step manuals, Developer's Applications and mini field guides for
the beginner to the advanced user. Some of these publications are also available
electronically as well as in hard copy. For more information and pricing,
please contact Microsoft Press at 800-677-7377.
MAINTENANCE:
Maintenance includes "version upgrades" and "successor or upgrade products"
meaning any "major product upgrade" (e.g., version 1.0 to 2.0), "minor product
upgrade" (e.g., version 2.0 to 2.1), and "maintenance upgrade" (e.g., version
2.01 to 2.01a) for such Products, which have been made generally available prior
to expiration/termination of the Program Agreement. Windows 95 is considered a
successor product to Windows 3.1 and Windows 3.11. Successor or upgrade
products do not include any existing or future product which are not a direct
successor to the Product such as extensions, add-on's and accessory products
marketed separately from the Product. For example, Microsoft(R) Word for
Windows(R) & Bookshelf(R) is not a direct successor to Microsoft(R) Word.
Further, Windows NT is a successor to earlier versions of Windows NT, but
Windows NT 3.5 is NOT a successor to Windows 3.1 or Windows 95. Competitive
upgrades from non-Microsoft products, and pre-released or "beta" version
software products are also not included. If an upgrade product is jointly
packaged with one or more additional products, such upgrade will only be
included if the product upgrade is not separately available in Licensee's area.
For Application Products, successor or upgrade products shall include any
platform upgrade which is the substitution of the Software which runs on one
operating environment (e.g., Apple(R) Macintosh(R)) for the same or similar
software product which runs on a different operating environment (e.g.,
Microsoft(R) Windows(R) or MS-DOS(R)); provided the Software for the new
operating environment has a Version Upgrade price equal to or lower than the
version to be substituted. When available, 32-bit versions of the Product shall
be considered successor products of the 16-bit versions of the Product. The
Product need not be upgraded within its original operating environment before it
can be switched to another operating environment. Successor or upgrade products
shall include the substitution of Software in one natural or spoken language
(e.g., Word for Windows(R) in French) for the same or similar software product
which is available in a different language (e.g., Word for Windows(R) in
English), provided that the Software in the new language has a maintenance price
equal to or lower than the language version to be substituted. Once upgraded,
the Product in all its language versions shall be considered a single product,
and may not be separated for use on more than one computer or by more than one
user at any time.
All maintenance end at the end of your prime contract regardless of any
remaining time.
<PAGE> 39
PRODUCT OFFERINGS DEFINITIONS
<TABLE>
<CAPTION>
Category Product Upgrades Includes
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Windows 95 Upgrade Internet Explorer
Office NT Workstation Clients: Windows 95, Windows NT,
Plus! for Windows 95 Windows 3.1, Macintosh, UNIX
- -----------------------------------------------------------------------------------------------------
Office Professional Word
Excel
PowerPoint
Access, FoxPro
Schedule+
Bookshelf
Outlook
Project
Front Page (included with NT Server)
Publisher
Visual Basic Enterprise Edition
- -----------------------------------------------------------------------------------------------------
BackOffice NT Server with Internet Information Server,
Index Server, and Front Page
SQL Server
Exchange Enterprise (includes connectors)
Systems Management Server
SNA Server
Proxy Server
BackOffice Client Access License NT Server Client Access
SQL Server Client Access
Exchange Client Access
Systems Management Server Client Access
SNA Server Client Access
- -----------------------------------------------------------------------------------------------------
Internet Explorer (included with Windows 95)
NetMeeting
News and Mail Client
Internet Information Server (included with NT Server)
Index Server (included with NT Server)
Proxy Server (included with BackOffice Server)
Personalization System
Content Replication System
Commerce Server
Usage Analyst Enterprise Edition
Site Analyst
Visual InterDev (promotional
offering)
Authoring and FrontPage (Included with NT Server)
- -----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 40
------------------------------------------
ActiveX Control Pad
Internet Assistants for MS Office
------------------------------------------
<PAGE> 1
EXHIBIT 10.20
INTER-COMPANY CROSS LICENSE AGREEMENT
This Agreement is entered into as of this 19th day of May, 1998 by and
between Internet Commerce Services Corporation, a Delaware corporation, with its
principal place of business at 550 S. Winchester Boulevard, Suite 300, San Jose,
CA 95128 (hereafter "ICS") and software.net Corporation, a California
corporation previously known as CyberSource Corporation, with its principal
place of business at 3031 Tisch Way, Suite 900, San Jose, CA 95128 (hereafter
"software.net").
RECITALS
A. WHEREAS, the parties entered into that certain Conveyance Agreement
dated December 31, 1997 (hereafter "Conveyance Agreement"), which among other
things, conveyed, transferred and assigned from CyberSource Corporation to
Internet Commerce Services Corporation all intellectual property and other
assets of the "back office" aspects of the internet commerce services business
of CyberSource Corporation; and
B. WHEREAS, in furtherance of the Conveyance Agreement, CyberSource has
executed and recorded with the United States Patent & Trademark Office, that
certain Assignment of Applications of Letters of Patent of the United States
dated March 26, 1998, and that certain Assignment of Marks dated March 26,
1998; and
C. WHEREAS, on or about April 22, 1998, CyberSource Corporation changed
its name to software.net Corporation; and
D. WHEREAS, on or about April 23, 1998, the parties entered into that
certain Inter-Company Cross License Agreement (the "Original Cross-License
Agreement") for the purposes of clarifying the ownership of such intellectual
property which has not been specifically described in the foregoing assignments
and to set forth the terms for the cross licensing of technology, data and
information held by each party; and
E. WHEREAS, the parties now desire to amend the Original Cross License
Agreement for the purposes of clarifying the terms of the Original Cross
License Agreement.
AGREEMENT
In consideration of the mutual agreements herein contained and other
good and valuable consideration, receipt and sufficiency of which is hereby
acknowledged, the parties agree that the Original Cross License Agreement shall
be amended and restated as follows:
1. DEFINITIONS. The following definitions shall apply to this Agreement
and each of the Schedules attached hereto.
1.1. "Internal use" (with or without capitalization) shall mean
use only by IP Licensee's employees, agents or authorized representatives on
computer systems controlled by IP Licensee.
1.2. "IP Owner" shall mean a party which is the owner of the
particular technology or intellectual property as identified in Section 2
hereunder.
<PAGE> 2
1.3. "IP Licensee" shall mean a party which is the licensee for a
particular technology or intellectual property as identified in Section 3
hereunder.
1.4. "Licensed IP" shall mean the particular technology or
intellectual property which is cross licensed under Section 3, herein.
2. OWNERSHIP OF INTELLECTUAL PROPERTY
2.1 software.net acknowledges, agrees and affirms that, as
between software.net and ICS, ICS is the sole and exclusive owner of the
following, and that nothing else was transferred to ICS under the Conveyance
Agreement except for the following:
2.1.1. That SmartCert Technology as described in Schedule
2.1.1, attached hereto (hereafter "SmartCert"), including without limitation,
any and all improvements, enhancements and modifications thereto created and
developed by either or both parties on or before December 31, 1998;
2.1.2. Those certain inventions as described in the patent
applications identified in Schedule 2.1.2, attached hereto ("Patents Pending");
2.1.3. Those certain "back office" technologies and
systems as described in Schedule 2.1.3, attached hereto (hereafter "Backoffice
Systems");
2.1.4. The rights to licenses of software and other
intellectual property acquired from third parties in connection with ICS's
internet commerce operations as described in Schedule 2.1.4, attached hereto
(hereafter "ICS Third Party Software"), subject to any required consents to
assignment which have not been obtained; and
2.1.5. The trademarks and service marks and applications
thereof described in Schedule 2.1.5, attached hereto (hereafter "ICS Trademarks,
Services Marks and Applications Thereof").
2.2. ICS acknowledges, agrees and affirms that as between
software.net and ICS, software.net is the sole and exclusive owner of the
following:
2.2.1. That software known as "Cache Manager", but
excluding the underlying SmartCert Technology, as described in Schedule 2.2.1
attached hereto (hereafter "Cache Manager"), including without limitation any
and all improvements, enhancements and modifications thereto created and
developed by either or both parties on or before December 31, 1998;
2.2.2. That certain database of customer information, as
described in Schedule 2.2.2, attached hereto (hereafter "Customer Database");
2.2.3. That certain software which comprises
software.net's internet software and digital content superstore and related
server engine as described in Schedule 2.2.3, attached hereto (hereafter "Store
Engine");
-2-
<PAGE> 3
2.2.4. The rights to licenses of software and other
intellectual property acquired from third parties in connection with
software.net's operations as described in Schedule 2.2.4, attached hereto
(hereafter "software.net Third Party Software"); and
2.2.5. The trademarks and service marks and applications
thereof described in Schedule 2.2.5, attached hereto (hereafter "software.net
Trademarks, Service Marks and Applications Thereof").
2.3. The parties acknowledge, agree and affirm that the utility
tools set forth in Schedule 2.3, attached hereto (hereafter "Jointly Owned
Utility Tools") are jointly owned by both parties and may be freely used by
either party without accounting to each other.
2.4. Ownership of any other inventions not cited in above
sections 2.1, 2.2 and 2.3, which were made by the parties on or before June 30,
1998 ("Background Inventions") shall be as follows:
2.4.1. If made exclusively by one party, then such
Background Inventions shall be the property of that party.
2.4.2. If made jointly by both parties, then such
Background Inventions shall be jointly owned without accounting to each other.
In the case of a jointly filed patent application, the patent expenses shall be
divided equally between the parties. If either party elects not to file an
application on a joint Background Invention and/or not pay its share of the
expenses thereof, the other party may file at its own expense and shall have
sole control of the prosecution thereof. The party not participating in the
prosecution thereof shall remain liable for its share of the expenses for
prosecution of the application unless it assigns its entire interest in the
Background Invention to the prosecuting party.
2.5. Ownership of improvements, enhancements and modifications
made by the parties after December 31, 1998 and before January 1, 2000 to any of
the technologies and information which are licensed under sections 3.1 and 3.3,
herein (hereafter "Enhancements") shall be treated as follows:
2.5.1. If made exclusively by one party, then such
Enhancements shall be the property of that party.
2.5.2. If made jointly by both parties, then such
Enhancements shall be jointly owned without accounting to each other. In the
case of a jointly filed patent application, the patent expenses shall be divided
equally between the parties. If either party elects not to file an application
on a jointly owned Enhancement and/or not pay its share of the expenses thereof,
the other party may file at its own expense and shall have sole control of the
prosecution thereof. The party not participating in the prosecution thereof
shall remain liable for its share of the expenses for prosecution of the
application unless it assigns its entire interest in the Enhancement to the
prosecuting party.
-3-
<PAGE> 4
2.6. Each of the parties agrees to execute, acknowledge, and
deliver as necessary any instruments confirming the ownership by the other in
accordance with this Section 2.
3. CROSS LICENSES.
3.1. SmartCert. ICS hereby grants to software.net, and
software.net accepts, a worldwide, perpetual, irrevocable, royalty-free license
with respect to the SmartCert Technology in object and source code (including
all related user documentation) as follows:
3.1.1. a non-exclusive license for software.net's
internal use only, which license shall also include the right to
reproduce and modify;
3.1.2. a license to modify the SmartCert software for
the purposes of merging it into Cache Manager alone or Cache
Manager in combination with other software (including all
related user documentation) developed, owned or licensed by
software.net and to reproduce and sublicense the merged product
(but not the SmartCert software alone) directly to, and for use
by, enterprises (including without limitation corporations,
partnerships, sole proprietorships and universities) and
governmental agencies, provided:
3.1.2.1. sublicenses of the merged product to
the U.S. Government or other governmental agencies shall
be as "restricted computer software" or "limited rights
data" as set forth in "Rights in Data - General" at 48
CFR 52.227-14, or as "commercial computer software" or
"commercial computer software documentation" under DFARS
252.227-7015, or under such other similar applicable
terms and conditions to prevent the transfer of rights
in and to the technology to the government other than
under normal commercial licensing terms and conditions;
and
3.1.2.2. sublicenses of the merged product shall
not include the right to further sublicense to another
party the merged product;
3.1.3. software.net shall keep the source code for the SmartCert
Technology confidential in accordance with Section 6, below.
3.2. Patents Pending. In the event that letters patent issue from the
Patents Pending, ICS grants to software.net, and software.net accepts, a
worldwide, perpetual, irrevocable, royalty-free, nonexclusive license to
practice any and all methods, systems and other inventions described in said
letters patent with the following conditions:
3.2.1. Such license shall not include the right to sublicense,
except in conjunction with, and only to the extent as necessary to give
effect to, the sublicense of any software, products or technology
licensed by ICS to software.net pursuant to any other license which may
be granted in writing by ICS to software.net, including the license set
forth in above Section 3.1.
3.2.2. Such license shall not in any way convey, grant or
transfer to software.net any right to use any software, technical data
or physical device owned by ICS, including without limitation, the
SmartCert Technology, its object code, source code and related
documentation. Any right to use such software, technical data or
physical device shall be governed by a separate license agreement, or
in the case of the SmartCert Technology, shall be governed by above
section 3.1.
-4-
<PAGE> 5
3.3. Cache Manager. software.net hereby grants to ICS, and ICS accepts,
a non-exclusive, worldwide, perpetual, irrevocable, royalty-free license with
respect to the Cache Manager software in source and object codes (including all
related user documentation) as follows:
3.3.1. such license shall be for ICS's internal use only, and
shall include the right to reproduce and modify the source and object
codes;
3.3.2. such license shall not permit any right to sublicense;
and
3.3.3. ICS shall keep the source code for the Cache Manager
confidential in accordance with Section 6, below.
3.4. Customer Database. software.net hereby grants to ICS, and ICS
accepts, a non-exclusive, worldwide, perpetual, irrevocable, royalty-free
license with respect to the Customer Database as follows:
3.4.1. Customer Database shall be used only as part of the fraud
detection and verification system owned by ICS, including without the
limitation, the IVS system, and shall include the right to reproduce and
modify;
3.4.2. sublicensing of the Customer Database is not permitted
except in conjunction with the sublicensing of ICS's fraud detection and
verification system provided that (i) sublicensees are expressly
prohibited under such sublicenses from using the Customer Data for any
purpose other than for fraud detection and verification utilizing ICS's
fraud detection and verification system, (ii) sublicensees shall not
have access to the raw, human-readable Customer Database, but shall have
only access to the evaluated scores derived from the utilization of the
fraud detection and verification system, (iii) such sublicensees shall
agree under said sublicenses that any such breach of said limitation of
use by sublicensee shall constitute irreparable injury which shall
entitle ICS and software.net to extraordinary remedies, including
without limitation, injunctive relief, and (iv) ICS indemnifies and
holds harmless software.net for any and all damages and losses suffered
by software.net resulting from any breach of said limitation of use by
any of such sublicensees, including without limitation any and all
attorneys' fees and costs to enjoin the unlawful use of the Customer
Data caused by such breach; and
3.4.3. ICS shall keep the Customer Database confidential in
accordance with Section 6, below.
3.5. Background Inventions. If any letters patent should issue on
Background Inventions which are owned exclusively by one party ("Single Owner
Background Patents"), the parties agree as follows:
-5-
<PAGE> 6
3.5.1. The owner of the Single Owner Background Patent
shall grant to the other party a worldwide, perpetual,
irrevocable, royalty-free, nonexclusive license, without the
right to sublicense, to practice any and all methods, systems
and inventions contained in the Single Owner Background Patent;
3.5.2. Such license to practice the Single Owner
Background Patent does not convey in any way to the licensee any
right to use any of the licensor's software, technical data or
physical device in connection with the Single Owner Background
Patent. Such use of the licensor's software, technical data or
physical device shall be governed by a separate license to be
negotiated and agreed to by the parties.
3.6. Relations Back to Date of Conveyance Agreement. Each of the
licenses of the Licensed IP by the IP Owners to the IP Licensees as set forth in
this Agreement shall be effective as of December 31, 1997, the effective date of
the Conveyance Agreement.
4. MOST FAVORED TERMS FOR ENHANCEMENTS. A party owning exclusively a
Enhancement is not required to offer such Enhancement to any entity. However, if
the party owning such Enhancement should offer such Enhancement to any third
party, it shall offer to the other party under this Agreement such Enhancement
under terms and conditions which are at least as favorable to the best terms and
conditions offered to any other third party under similar circumstances. If at
any time more favorable terms and conditions are granted to any third party
pertaining to such Enhancement, the party acting as IP Owner or grantor shall
notify the other party herein and, if the other party so elects, shall be
automatically become entitled to such more favorable terms and conditions.
5. LIMITATION OF WARRANTY. DISCLAIMER OF WARRANTIES. EACH OF THE
TECHNOLOGIES, INFORMATION AND INTELLECTUAL PROPERTIES LICENSED HEREUNDER ARE
PROVIDED "AS IS" WITH ALL FAULTS AND WITHOUT ANY REPRESENTATIONS OR WARRANTIES.
THE ENTIRE RISK AS TO SATISFACTORY QUALITY, PERFORMANCE, ACCURACY, AND EFFORT IS
WITH THE IP LICENSEE. THIS DISCLAIMER OF WARRANTY EXTENDS TO THE RESPECTIVE IP
LICENSEES AND IP LICENSEE'S CUSTOMERS AND END-USERS AND IS IN LIEU OF ALL
WARRANTIES AND CONDITIONS WHETHER EXPRESS, IMPLIED, OR STATUTORY, INCLUDING THE
IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR PARTICULAR PURPOSE, TITLE AND
NONINFRINGEMENT WITH RESPECT TO THE LICENSED TECHNOLOGIES AND INTELLECTUAL
PROPERTIES.
6. CONFIDENTIALITY. The Customer Database, the Patents Pending,
Backoffice Systems and the source code for SmartCert, Cache Manager and the
Store Engine and all documentation and information designated by the party
disclosing the information (the "Disclosing Party") as proprietary and
confidential, including without limitation drawings, computer program listings,
techniques, algorithms and processes and technical and marketing information
which are supplied by the Disclosing Party in connection with this Agreement or
which have been treated by either of the parties heretofore as proprietary and
confidential (the foregoing shall be collectively referred to hereafter as
"Confidential Information") shall be
-6-
<PAGE> 7
treated confidentially by the recipient of Confidential Information
("Recipient") and its employees, and shall not be disclosed by the
Recipient without Disclosing Party's prior written consent. Each party
shall have an appropriate agreement with each of its employees having
access to the Confidential Information sufficient to enable the party to
comply with all terms of this Agreement. Each party agrees to protect
the Confidential Information with the same (but in no case less than
reasonable) standard of care and procedures it uses to protect its own
trade secrets and proprietary information.
7. INDEMNITY.
7.1. Each IP Licensee shall indemnify and hold harmless the IP
Owner for any and all third party claims based on the IP Licensee's usage of the
Licensed IP, excluding any third party claim based on a claim that Licensed IP
infringes the third party's patent, copyright, trademark or other proprietary
right.
7.2. The indemnities set forth in sections section 3.4.2 and 7.1,
above, will not apply to the extent the party claiming the indemnification was
responsible for giving rise to the matter upon which the claim for
indemnification is based and will not apply unless the party claiming
indemnification promptly notifies the other of any matters in respect of which
the indemnity may apply and of which the notifying party has knowledge and gives
the other full opportunity to control the response thereto and the defense
thereof, including without limitation any agreement relating to the settlement
thereof.
8. LIMITATION OF LIABILITY. EXCEPT FOR LIABILITY FOR PERSONAL INJURY AND
PHYSICAL PROPERTY DAMAGE, THE INDEMNITY PROVISIONS OF SECTION 3.4.2, ABOVE, AND
A BREACH OF THE CONFIDENTIALITY PROVISIONS OF SECTION 6, ABOVE, IN NO EVENT
SHALL EITHER PARTY BE LIABLE FOR ANY SPECIAL, PUNITIVE, EXEMPLARY, INDIRECT,
INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING BUT NOT LIMITED TO SUCH DAMAGES
ARISING FROM BREACH OF CONTRACT OR WARRANTY OR FROM NEGLIGENCE OR STRICT
LIABILITY), OR FOR INTERRUPTED COMMUNICATIONS, LOST DATA, LOST PROFITS, LOST
SAVINGS, OR ANY COST OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES ARISING OUT
OF OR RESULTING FROM THIS AGREEMENT, EVEN IF THE PARTY HAD BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
9. MARKINGS. In conjunction with the licenses granted herein, the
respective IP Licensee shall agree to place such markings, notices and legends
as requested by the IP Owner for purposes of preservation of rights under
patent, copyright, trademark or other proprietary rights.
10. TERMINATION. Any IP Licensee may terminate its license for the
applicable Licensed IP by giving written notice and returning to the IP Owner
all copies of the Licensed IP in its possession. All sublicenses and licenses,
if any, granted by the IP Licensee as permitted under the terms of this
Agreement shall continue under their own terms.
11. GENERAL
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<PAGE> 8
11.1. Governing Law. This Agreement shall be governed and
interpreted by the laws of the State of California, excluding its conflict of
laws provisions. The parties agree that any action brought for any dispute
between the parties relating to this Agreement shall take place in, and the
parties consent to jurisdiction of, the Superior Court for the County of Santa
Clara or the United States District Court for the Northern California District
in San Jose, California.
11.2. Irreparable Injury. The parties agree that a violation or
breach of Sections 3, 4, 6 and 9, herein, will result in irreparable injury and
agree that such provisions shall be specifically enforced by the injured party.
11.3. Severability; Waiver. If any provision of this Agreement is
held to be invalid or unenforceable for any reason, the remaining provisions
will continue in full force without being impaired or invalidated in any way.
The parties agree to replace any invalid provision with a valid provision which
most closely approximates the intent and economic effect of the invalid
provision. The waiver by either party of a breach of any provision of this
Agreement will not operate or be interpreted as a waiver of any other or
subsequent breach.
11.4. Headings. Headings used in this Agreement are for reference
purposes only and in no way define, limit, construe or describe the scope or
extent of such section or in any way affect this Agreement.
11.5. Successors and Assigns. This Agreement, and the licenses
herein granted, will inure to the benefit of, and be binding upon, the parties
hereto and their respective successors and assigns, but will not be assigned by
either party, except to a wholly-owned subsidiary or to a party acquiring
substantially all of its business and assuming all of its obligations and
liabilities, without the written consent of the other party. In the event of any
assignment, the transferor or assignor will remain obligated to perform its own
obligations and, in addition, will be jointly liable for the proper performance
of the obligations of the transferee or assignee pursuant to this Agreement.
11.6. Notice. Any notices required or permitted hereunder shall
be given to the appropriate party at the address specified above or at such
other address as the party shall specify in writing. Such notice shall be deemed
given: upon personal delivery; if sent by telephone facsimile, upon confirmation
of receipt; if sent by electronic mail, upon confirmation of receipt; or if sent
by certified or registered mail, postage prepaid, five (5) days after the date
of mailing.
11.7. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
be taken together and deemed to be one instrument.
11.8. Entire Agreement. This Agreement, including any exhibits
attached hereto, and the Conveyance Agreement sets forth the entire
understanding and agreement of the parties and supersedes any and all oral or
written agreements or understandings between the parties, including without
limitation the Original Cross License Agreement, as to the subject matter of
this Agreement. It may be changed only by a writing signed by both parties.
Neither party is relying upon any warranties, representations, assurances or
inducements not expressly set forth herein.
-8-
<PAGE> 9
IN WITNESS WHEREOF, each of the parties hereto have executed this
Agreement as of the date first written above.
SOFTWARE.NET CORPORATION: INTERNET COMMERCE SERVICES
CORPORATION:
By: /s/ Jim Lussier By: /s/ W.S. McKiernan
-------------------------------- -------------------------------
Title: V.P., Business Operations Title: President & CEO
----------------------------- ----------------------------
Fax: 415-241-8258 Fax: 408-241-8270
------------------------------- ------------------------------
E Mail: [email protected] E Mail: [email protected]
---------------------------- --------------------------
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<PAGE> 10
SCHEDULE 2.1.1
SMARTCERT TECHNOLOGY
All right, title, interest, and benefit (including to make, use, or sell
under patent law; to copy, adapt, distribute, display, perform, transmit and
access under copyright law; and to use and disclose under trade secret law) in
and to all United States and foreign patents and patent applications, patent
license rights, patentable inventions, trade secrets, trademarks, service marks,
trade names (including, in the case of trademarks, service marks and trade
names, all goodwill appertaining thereto), copyrights, technology licenses,
know-how, confidential information, shop rights, and all other intellectual
property rights owned or claimed in the following:
That certain software program, in object code and source code,
called SmartCert by the parties, which program is used to deliver
products electronically together with marketing and promotional
information. Such program, among other things, tracks the
transmission of electronically distributed software and has
features which enables interrupted downloads to be resumed
without reloading the entire product.
<PAGE> 11
SCHEDULE 2.1.2
PATENTS PENDING
[*] which has been recorded with the United States Patent & Trademark
Office, all right, title and interest (including without limitation, all
divisional, continuing, substitute, renewal and reissue applications thereof) in
and to the following applications pending with the United States Patent &
Trademark Office:
<TABLE>
<CAPTION>
TITLE APPLICATION NO. FILING DATE
- ----- --------------- -----------
<S> <C> <C>
[*] [*] [*]
[*] [*] [*]
[*] [*] [*]
</TABLE>
<PAGE> 12
SCHEDULE 2.1.3
BACK OFFICE SYSTEMS
All right, title and interest in those backoffice software systems which
are operated by ICS as of the date of this Agreement, except as otherwise
specified in Section 2.2 of this Agreement, including without limitation:
1. Payment processing system
2. IVS system
3. Export and territory management system
4. Fulfillment house notification system
5. Rights management system
6. Global rights registry (old LCH) database system
7. US sales tax calculation system
8. IBM/SMS NetTrade Finance system for international currency payment
processing
9. VAT calculation system
10. Digital warehouse for storing and downloading digital products like
software
11. Simple Commerce Messaging Protocol (SCMP) client libraries and
related server libraries and functions
12. Digital Commerce Component (DCC), an SCMP implementation over
Windows NT for Microsoft Site Server
13. Payment processing software for direct connection to FUSA and other
processors
14. SmartReg web site and associated images, scripts and server
components
15. www.cybersource.com web site and associated images, scripts, server
components and worldwide registered use of name
16. www.esdmap.org web site and associated images, scripts, server
components and worldwide registered use of name
17. CommerceFLEX and all components
18. CommerceEZ and all related components
<PAGE> 13
19. The EDI message and transaction processing systems and
infrastructure
20. The Thin Server framework and application concepts
-2-
<PAGE> 14
SECTION 2.1.4
ICS THIRD PARTY SOFTWARE
All rights to the licenses from third parties for products which are
used by ICS in its operations, including without limitation:
1. Vertex tax system
2. Sybase
3. CyberCash system for payment processing
4. IC Verify system for payment processing
5. Operating system software from SUN supporting for all servers owned
by ICS
6. Development tools (software) from SUN and Microsoft for platforms
7. SUN Net Manager
<PAGE> 15
SCHEDULE 2.1.5
ICS TRADEMARKS, SERVICE MARKS AND APPLICATIONS THEREOF
A. Subject to the Assignment of Marks dated March 26, 1998, all right,
title and interest in and to the following trademarks, service marks and
applications thereof, together with all goodwill appertaining thereto:
<TABLE>
<CAPTION>
UNITED STATES MARK USPTO REGISTRATION NO.
- ------------------ ----------------------
<S> <C>
CYBERSOURCE 2,006,769
</TABLE>
<TABLE>
<CAPTION>
UNITED STATES MARK USPTO APPLICATION SERIAL NO.
- ------------------ ----------------------------
<S> <C>
CYBERSOURCE 75/411012
IVS 75/310542
COMMERCEEZ 75/240894
COMMERCEFLEX 75/240895
SMARTCERT 75/417912
</TABLE>
B. All right, title and interest in and to the following trademarks,
service marks and applications thereof, together with all goodwill appertaining
thereto:
<TABLE>
<CAPTION>
INTERNATIONAL MARK COUNTRY APPLICATION NO.
- ------------------ ------- ---------------
<S> <C> <C>
CYBERSOURCE European Union (CTM) 000678391
CYBERSOURCE Canada 0869935
SMARTCERT European Union (CTM) 000728253
SMARTCERT Canada 0869936
</TABLE>
<PAGE> 16
SCHEDULE 2.2.1
CACHE MANAGER
All right, title, interest, and benefit (including to make, use, or sell
under patent law; to copy, adapt, distribute, display, perform, transmit and
access under copyright law; and to use and disclose under trade secret law) in
and to all United States and foreign patents and patent applications, patent
license rights, patentable inventions, trade secrets, trademarks, service marks,
trade names (including, in the case of trademarks, service marks and trade
names, all goodwill appertaining thereto), copyrights, technology licenses,
know-how, confidential information, shop rights, and all other intellectual
property rights owned or claimed in the following (excluding the SmartCert
Technology, which is owned by ICS):
That software, in object code and source code, called Cache
Manager by the parties, which works in conjunction with the
SmartCert software to enable a cache of downloaded software at
locations inside a customer's firewall. Cache Manager enables the
distribution of caches of software to locations within an
enterprise, ensuring a large enterprise that the current release
of software programs is available to staff with minimal
management intervention.
<PAGE> 17
SCHEDULE 2.2.2
CUSTOMER DATABASE
All right, title and interest in the information gathered by
software.net related to its customers and which information has been used by ICS
in its fraud detection and verification system as of April 23, 1998.
<PAGE> 18
SCHEDULE 2.2.3
THE STORE ENGINE
All right, title and interest in the software and digital content
superstore software systems (the "Store Engine" systems) which are operated by
software.net as of the date of this Agreement, except as otherwise specified in
Section 2.1 of this Agreement, including without limitation:
The computer software, in object code and source code, which is
based on a distributed transaction processing model that runs the
entire software.net site, excluding any ownership rights to
software that is licensed by ICS or third parties to
software.net.
Any and all software (source and object) related to the webpages
produced by either or both parties since its inception
appertaining to the software.net URL.
<PAGE> 19
SCHEDULE 2.2.4
SOFTWARE.NET THIRD PARTY SOFTWARE
All rights to the licenses from third parties for products which are
used by software.net in its operations, including without limitation:
1. Netscape web servers
2. Any and all operating system and development tools software
licensed for machines owned by software.net
3. All software licensed from Microsoft under the internal use
agreement between Microsoft and software.net
4. Such other business applications resident on systems owned by
software.net
5. Solomon accounting software
6. Quickbooks accounting software
<PAGE> 20
SCHEDULE 2.2.5
SOFTWARE.NET TRADEMARKS, SERVICE MARKS AND APPLICATIONS THEREOF
All right, title and interest in and to the following trademarks,
service marks and applications thereof, together with all goodwill appertaining
thereto:
<TABLE>
<CAPTION>
UNITED STATES MARK USPTO SERIAL NO.
- ------------------ ----------------
<S> <C>
SOFTWARE.NET 74/565186
SOFTWARE.NET plus DESIGN 75/304973
SOFTWARE TV 75/371655
DIGITAL GEAR 75/442168
</TABLE>
<PAGE> 21
SCHEDULE 2.3
JOINTLY OWNED UTILITY TOOLS
Any and all internally written tools to monitor the correct operation of
web servers, routers and other network equipment created by either or both
parties on or before the date of this Agreement.
<PAGE> 1
EXHIBIT 10.24
INTERNET COMMERCE SERVICES AGREEMENT
This Internet Commerce Services Agreement (the "Agreement") is entered
into as of April 23rd 1998 between Internet Commerce Services Corporation, a
California corporation ("ICS"), and software.net, a California corporation (the
"Customer").
The Customer desires to obtain and ICS is willing to supply certain
electronic commerce support services on the terms and subject to the conditions
set forth in this Agreement.
For good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, ICS and the Customer hereby agree as follows:
1. The Internet Commerce Services.
(a) ICS will provide the Customer with the Internet Commerce Services set forth
on Annex 1 to this Agreement (the "Services"). Customer will remit to ICS
the setup fee set forth in Annex 2 upon execution of this Agreement.
(b) ICS will deliver to Customer an invoice for fixed monthly subscription fees
and non-fixed monthly transaction fees relating to the Services in the
amounts set forth on Annex 2 to this Agreement on the [first (1st)]
business day of each month following the month in which the Services are
provided (the "ICS Invoice"). Customer will remit the amounts due under the
ICS Invoice on or before the thirtieth (30th) day of the month following
the month in which the Services are provided.
(c) Interest shall accrue on any unpaid fees owed by the Customer to ICS
pursuant to this Section 1 at the lower of 1.5% per month or the maximum
amount permitted by applicable law.
(d) ICS shall be entitled to revise any and all of the aforesaid monthly fees
in respect of any Additional Term (as defined in Section 2 of this
Agreement) provided that ICS gives notice to the Customer on or before the
sixtieth (60th) day (including non-business days) prior to the commencement
of any such Additional Term.
2. Term and Termination.
(a) The initial term of this Agreement shall be one (1) year from the date
hereof. Thereafter this Agreement will renew automatically for additional
terms of one (1) year (each such term hereinafter an "Additional Term")
unless (i) Customer gives written notice of termination to ICS of not less
than thirty (30) calendar days, or (ii) ICS gives notice to Customer of not
less than sixty (60) calendar days, prior to any such renewal that the
Agreement shall not so renew.
(b) The Agreement may be terminated by either party at any time in the event of
a material breach by the other party which remains uncured after thirty
(30) day written notice thereof. The parties acknowledge that non-payment
of fees constitutes a material breach of this Agreement. Failure on the
part of ICS to operate at less than 98% availability over any two week
period shall constitute material breach of this Agreement.
(c) The Agreement may be terminated by Software.net in the event ICS fails to:
(i) operate at less than 98% availability over any two week period (ii)
demonstrate good faith efforts to provide 15 second transaction response
time commencing after the date of implementing direct payment processing
capability.
(d) In the event that ICS reasonably believes that Customer's conduct or
Customer's products or their contents violate applicable law, injure the
reputation of ICS, or pose a threat to ICS's systems, equipment, processes,
or Intellectual Property Rights (as defined in Section 12 of this
Agreement), ICS may discontinue providing the Services.
(e) The Agreement may be terminated be either party effective immediately and
without any requirement of notice, in the event that (i) the other party by
files a petition in bankruptcy, files a petition seeking any
reorganization, arrangement, composition, or similar relief under any law
regarding insolvency or relief for debtors, or makes an assignment for the
benefit of creditors; (ii) a receiver, trustee, or similar officer is
appointed for the business or property of such party; (iii) any involuntary
petition or proceeding under bankruptcy or insolvency laws is instituted
against such party and not stayed, enjoined, or discharged within sixty
(60) days; or (iv) the other party adopts a resolution for discontinuance
of its business or for dissolution.
3. Intellectual Property Rights.
Except to the extent set forth in Annex 2 of this Agreement, neither
party will acquire any ownership interest in the other's Intellectual Property
Rights. All Intellectual Property Rights not specifically granted in this
Agreement are reserved by the parties. The Customer agrees that all
Intellectual Property Rights created by ICS in connection with this Agreement
and all the documentation therefor and all renewals and extensions thereof,
shall be entirely ICS's property, free of any claims whatsoever by the
Customer. ICS shall have the sole and exclusive right to register such
Intellectual Property Rights.
4. Confidential Information.
(a) Each party acknowledges and agrees that any Confidential information
received from the other party will be the sole and exclusive property of
the other party and may not be used or disclosed except as necessary to
perform the obligations required under this Agreement.
(b) Upon termination of this Agreement, each party shall promptly return all
information, documents, manuals and other materials belonging to the other
party except as otherwise provided in this Agreement.
5. Promotional Materials/Press Release.
Each party shall submit to the other for approval (which approval
shall not be unreasonably withheld), marketing, advertising, press releases, and
other promotional materials related to the Services and referencing, as the
case may be, the Customer or ICS; provided, however, that each shall be
permitted to disclose the existence of the Agreement without the consent of the
other.
6. Limitation of Liability.
(a) UNDER NO CIRCUMSTANCES SHALL (i) EITHER PARTY BE LIABLE TO THE OTHER PARTY
OR ANY THIRD PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR
EXEMPLARY DAMAGES (EVEN IF THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES), ARISING FROM THE USE OR INABILITY TO USE THE SERVICES OR
ANY OTHER PROVISION OF THIS AGREEMENT, SUCH AS, BUT NOT LIMITED TO, LOSS OF
REVENUE OR ANTICIPATED PROFITS OR LOST BUSINESS, COSTS OF DELAY, ANY
FAILURE OF DELIVERY, COSTS OF LOST OR DAMAGED DATA OR DOCUMENTATION, OR
LIABILITIES TO THIRD PARTIES ARISING FROM ANY SOURCE OR (ii) ICS BE LIABLE
TO THE CUSTOMER OR ANY THIRD PARTY FOR ANY DAMAGES ARISING OUT OF THE
SERVICES OR OTHERWISE ARISING OUT OF THIS AGREEMENT IN EXCESS OF THE AMOUNT
OF FEES ACTUALLY PAID TO ICS BY THE CUSTOMER PURSUANT TO SECTION 1 OF THIS
AGREEMENT.
(b) THE CUSTOMER SHALL BEAR (i) ALL COLLECTION RISK (INCLUDING, WITHOUT
LIMITATION, CREDIT CARD FRAUD AND ANY OTHER TYPE OF CREDIT FRAUD) WITH
RESPECT TO SALES OF ITS PRODUCTS AND (ii) ALL RESPONSIBILITY AND LIABILITY
FOR THE PROPER PAYMENT OF ALL TAXES WHICH MAY BE LEVIED OR ASSESSED
(INCLUDING, WITHOUT LIMITATION, SALES TAXES) WHICH MAY BE LEVIED IN RESPECT
OF SALES OF ITS OR ITS CUSTOMERS' PRODUCTS.
(c) Except as set forth in the Annexes to this Agreement, the Customer is
solely responsible for maintaining complete backup records of all
information relating to its customers' orders, inquiries and purchases and
any other customer information once such information has been provided to
the Customer by ICS.
(d) ICS has no obligation to attempt to monitor or regulate the content of the
Products and Customer agrees to hold ICS harmless in the event that the
content of any of the Products is illegal. The Customer hereby represents
and warrants to ICS that the Products do not infringe on or violate the
Intellectual Property Rights of any third party and will not contain any
content which violates any applicable law, regulation or third party right.
7. No Additional Warranties.
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, ICS HEREBY
SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED,
REGARDING THE SERVICES, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE AND IMPLIED WARRANTIES ARISING FROM COURSE OF
DEALING OR COURSE OF PERFORMANCE.
8. Relationship of Parties.
The parties shall perform all of their duties under this Agreement as
independent contractors. Nothing in this Agreement shall be construed to give
either party the power to direct or control the daily activities of the other
party, or the constitute the parties as principal and agent, employer and
employee, franchisor and franchisee, partners, joint venturers, co-owners, or
otherwise as participants in a joint undertaking. The parties understand and
agree that, except as specifically provided in this Agreement, neither party
grants the other party the power or authority to make or give any agreement,
statement, representation, warranty, or other commitment on behalf of the other
party, or to enter into any contract or otherwise incur any liability or
obligation, express or implied, on behalf of the other party; or to transfer,
release, or waive any right, title, or interest of
<PAGE> 2
such other party.
9. Entire Agreement.
This Agreement (including the Annexes hereto) constitutes and contains the
entire agreement between the parties with respect to the subject matter hereof
and supersedes any prior oral or written agreements. Each party acknowledges
and agrees that the other has not made any representations, warranties or
agreements of any kind, except as expressly set forth herein.
10. Modifications, Amendments, and Waivers.
This Agreement may not be modified or amended, including by custom, usage
of trade, or course of dealing, except by an instrument in writing signed by
duly authorized officers of both of the parties hereto.
11. Counterparts.
This Agreement may be executed in counterparts each of which shall be
deemed an original and all such counterparts shall constitute one and the same
agreement.
12. Certain Definitions.
The following definitions shall apply to this Agreement and each of the
Annexes to this Agreement.
"Confidential Information" Any data or information, oral or written,
treated as confidential that relates to either party's (or, if either party is
bound to protect the confidentiality of any third party's information, such
third party's) past, present, or future research, development or business
activities, including any unannounced product(s) and service(s), any information
relating to services, developments, inventions, processes, plans, financial
information, forecasts, and projections and the financial terms of this
Agreement. Notwithstanding the foregoing, Confidential Information shall not be
deemed to include information if: (i) it was already known to the receiving
party prior to the date of this Agreement as established by documentary
evidence; (ii) it is in or has entered the public domain through no breach of
this Agreement or other wrongful act of the receiving party; (iii) it has been
rightfully received by the receiving party from a third party and without breach
of any obligation of confidentiality of such third party to the owner of the
Confidential Information; (iv) it has been approved for release by written
authorization of the owner of the Confidential Information; (v) demographic,
product purchasing data or similar market analysis information derived by ICS
from the information described in the preceding sentence; or (v) it is required
to be disclosed pursuant to final binding order of a governmental agency or
court of competent jurisdiction, provided that the owner of the Confidential
Information has been given reasonable notice of the pendency of such an order
and the opportunity to contest it.
"Intellectual Property Rights." All (a) copyrights (including, without
limitation, the exclusive right to reproduce, distribute copies of, display and
perform the copyrighted work and to prepare derivative works), copyright
registrations and applications, trademark rights (including, without limitation,
registrations and applications), patent rights, trade names, mask-work rights,
trade secrets, moral rights, author's rights, algorithms, rights in packaging,
goodwill and other intellectual property rights, and all renewals and extensions
thereof, regardless of whether any of such rights arise under the laws of the
United States or any other state, country or jurisdiction; (b) intangible legal
rights or interests evidenced by or embodied in any idea, design, concept,
technique, invention, discovery, enhancement or improvement, regardless of
patentability, but including patents, patent applications, trade secrets, and
know-how; and (c) all derivatives of any of the foregoing.
"Products" Those products and/or services of the Customer in respect of
which the Services will be utilized.
13. Export Screening.
In completing the Services ICS will use reasonable efforts to (i) obtain
the credit card statement mailing address in addition to all other information
supplied by the prospective customers and their browsers, (ii) deny shipments
to any countries to which exports are prohibited by United States law, and
(iii) deny shipments to parties listed on the United States list of Specially
Designated Nationals or the Table of Denial Orders.
14. Governmental Law; Consent to Jurisdiction.
This Agreement will be deemed entered into in California and will be
governed by and interpreted in accordance with the laws of the State of
California, excluding (i) that body of law known as conflicts of law, and (ii)
the United Nations Convention on Contracts for the Sale of Goods. The parties
agree that any dispute arising under this Agreement will be resolved in the
state or federal courts in Santa Clara County, California, and the parties
hereby expressly consent to jurisdiction therein.
15. Assignment.
This Agreement may not be transferred or assigned by either party other
than by operation of law or to either party's lenders for collateral security
purposes, without the prior written consent of the other party, which consent
shall not be unreasonably withheld. Any attempt by either party to assign any
of its rights or delegate any of its duties hereunder without the prior written
consent of the other party shall be null and void.
16. Survival.
The provisions of this Agreement relating to payment of any fees or other
amounts owed, payment of any interest on unpaid fees, confidentiality and
warranties and indemnities shall survive any termination or expiration of this
Agreement.
17. Headings.
The headings in this Agreement are intended for convenience of reference
and shall not affect its interpretation.
18. Force Majeure.
Neither party shall be responsible for delays or failures in performance
resulting from acts beyond its control, such as acts of God, acts of war,
computer viruses, epidemics, power outages, fire, earthquakes and other
disasters.
19. Notices.
Any notice, approval, request, authorization, direction or other
communication under this Agreement shall be given in writing at the address set
forth below and shall be deemed to have been delivered and given for all
purposes (i) on the delivery date it delivered personally to the party to whom
the same is directed; (ii) one (1) business day after deposit with a commercial
overnight carrier, with written verification of receipt, and (iii) upon
completion of transmission if sent via telecopier with an confirmation of
successful transmission.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
ICS CORPORATION
550 S. Winchester Boulevard, Suite 301
San Jose, CA 95128-2545
(408)556-9100 Fax: (408)241-8270
Attn: GREGORY T. QUINN
--------------------------------
Phone: 408-260-6091
-------------------------------
By: /s/ GREGORY T. QUINN
---------------------------------
(signature of authorized ICS
employee)
Name:
CUSTOMER:
Software.net 3031 Tisch Way
- -------------------------------------
San Jose, CA 95328
- -------------------------------------
Attn: John Pettitt
--------------------------------
Phone: 408-490-3011
-------------------------------
Fax:
---------------------------------
By: /s/ JOHN PETTITT
----------------------------------
(signature of authorized employee)
Name: John Pettitt
--------------------------------
(print)
Title: LTO
-------------------------------
<PAGE> 3
ANNEX 1
INTERNET COMMERCE SERVICES
MERCHANT SETUP AND ACTIVATION
Activation Fees: See Software.net pricing schedule Annex 2
This section describes the specific Merchant setup deliverables for Internet
Commerce Services.
INTERNET COMMERCE SERVICES CORPORATION (ICS) SCMP ACCESS SOFTWARE
1. Access to download the SCMP libraries or the appropriate plugin and
documentation.
2. Single run time license for the merchant to issue commerce transactions
using SCMP libraries, scripts and programs.
SUPPORT, TESTING AND ACTIVATION
1. Setup of single SCMP client merchant account in the ICS system to access the
ICS Commerce servers.
2. Setup of public/private key pairs for the merchant.
3. Support during initial testing of ICS transactions on the ICS test server.
The ICS test server is used to validate operation of the SCMP client
merchant account with the ICS ICS servers and validate a proper return
result message from ICS. A test server is available 7x24. There is no
charge for test transactions.
4. Setup of customer support screens to use ICS Customer support interface.
Setup and testing of customer support interface.
5. Testing of credit card merchant account with a Technical Support
representative to validate proper communication with the bank and payment
processors.
IMPORTANT-Establishing the credit card merchant account is the
responsibility of merchant. ICS has relationships with many different
merchant banks and credit card service providers. A referral can be
provided as requested.
6. Full-cycle system testing to verify ability of complete system to process a
transaction from the start to finish. Availability to test will be
configured within two business days from request. Merchant notifies its
assigned Technical Support Representative via email and requests being moved
to the production servers. ICS updates its database and clears out all test
transactions in order to begin billing. At that point, ICS considers the
merchant "live" and all transactions are billable.
7. Technical Support phone support time is covered under this agreement for up
to sixty (60) days from the signing of the agreement. Additional time is
available if required. See Annex 2 for pricing.
NOTE: The Technical Support time is dedicated to helping the merchant do all
the proper testing prior to going public. Tech support will not help with code
development, business rules, or any other requests that are outside the scope
of setting up a merchant to use our services. Should a merchant require other
services, ICS will gladly recommend a systems Integrator.
MERCHANT SERVICES MONTHLY SUBSCRIPTION FEE
1. Maintenance of account to access the specific ICS services
DIGITAL COMMERCE TRANSACTIONS
TRANSACTIONS FEES: See Software.net pricing schedule Annex 2
AVAILABLE SERVICES: The following services are available in response to
each transaction request from the Merchant.
1. RISK MANAGEMENT AND TERRITORY MANAGEMENT SERVICES
(a) IVS(TM) Fraud Screen-In addition to real-time bank validation, every
transaction is checked, analyzed, and cross-checked by over 150 operations
for assessment of fraud risk. A score is applied based on the findings and
the resulting score is then returned via an SCMP message to the merchant for
an accept or decline order decision.
(b) US Government Export Compliance-Each transaction is checked and analyzed to
comply with the restricted countries list and the restricted individual
parties list from the United States State Department and Treasury
Department.
<PAGE> 4
(c) Territory Management - Each transaction is checked against the Merchant's
pre-defined territory restrictions. This enables the Merchant to set rules
that disallow sales to specific countries in order to keep a stable price
model or honor special distribution agreements within a country.
2. DIGITAL PRODUCTS DELIVERY SERVICES
(a) Digital Product Managed Download - ICS will dynamically generate a URL for
downloading purchased digital products from the ICS BOB servers. IMPORTANT
- Before requesting this service, you will need to register your digital
products with ICS and host them on the ICS download servers.
(b) Issue Key - Pay First model - ICS will dynamically build an Electronic
License Certificate (ELC) with the end-users information and rights to the
product and send that ELC directly to the end-user. If the merchant
selects one of the other offered technologies, ICS will issue the
appropriate unlock key based on the merchants selected technology. See the
appropriate product data sheet for the specifics of how the key is
generated and delivered. Credit Card pre-authorization.
(c) Issue Key - Try before you buy (TBYB) model - ICS will issue the
appropriate unlock key based on the merchants selected TBYB technology.
See the appropriate product data sheet for the specifics of how the key is
generated and delivered.
(d) Rights Revocation - Return Key/ELC - ICS will accept a return key/ELC
request from the merchant. In the case of an GRR issued ELC, the request
will need to be followed by a Letter of Destruction (LOD) signed by the
end user sent to the Merchant before the return will be reported to the IP
owner.
3. DIGITAL PRODUCT PACKAGING AND WAREHOUSING
(a) Digital Delivery Preparation Options - ICS will digitally "package" each
product with the merchant's selected packaging technology (See Annex 2 for
available packaging options). This includes digitally preparing the gold
master code into Bag of Bits (BOB), testing of the unpack process for
complete file decryption, and initialization of the install process. ICS
will turnaround a prepared digital product within 7 working days from
receipt of golden master and all information required for packing and
distribution. Rush charges may apply for requested shorter turnaround (see
Annex 2).
COMMERCIAL SERVICES AND PHYSICAL FULFILLMENT TRANSACTIONS
Transactions Fees: See Software.net pricing schedule Annex 2
AVAILABLE SERVICES:
1. PAYMENT PROCESSING
(a) Credit Card pre-authorization - (this includes the banks Address
Verification Service (AVS) if available). Bank confirmation that the card
is a valid number and has the appropriate amount of funds for the
transaction. AVS checks the billing address provided matches the billing
address on record with the bank.
(b) Credit Card settlement (Bill) - billing and posting of pre-authorized
funds to merchant account.
(c) Credit/Return - process a credit to the credit card holder's account.
Merchants can credit a transaction that has already been billed in the
event of a product return.
2. SALES TAX PROCESSING
(a) Tax Calculation - Use of Vertex tax tables for calculation of sales tax.
ICS will calculate tax based on the merchant defined nexus and product
category selections, ICS will return the tax value as a separate line item
in the SCMP name/value pair format. ICS will also provide tax as a
separate line item in the daily and monthly reports. IMPORTANT - it is the
responsibility of the merchant to capture and store this tax data in their
own database systems for proper reporting and filing of taxes. ICS does
not provide any special tax reports.
<PAGE> 5
3. FULFILLMENT HOUSE MESSAGING
a) Ship order message to Fulfillment house - ICS will send a ship product
message to a Fulfillment House for pick, pack and ship of an order.
ICS supports a standard message. Merchant can select the desired
delivery methods: email, PGP email, SCMP, or EDI messaging. If
Merchant wishes Fulfillment House to process card settlement for
merchant after the order has been shipped, the message sent from ICS
to the Fulfillment house must be encrypted to protect customer's
credit card data. Some of the noted options may require additional
setup charges (see Annex 2). Set-up of the Fulfillment House must be
completed prior to transacting business at the site.
4. STANDARD REPORTING FROM MERCHANT SERVICES CONSISTS OF THE FOLLOWING:
- Reports: 1 daily; 1 monthly.
- Formats: std. ASCII text tab delimited.
- Reports are sent as email attachments.
The reports will consist of a Tab delimited file containing full
information on all attempted orders. Important - these reports are NOT
intended for individual service transaction reconciliation (e.g.,
IVS_score, ics_bill). They are order level details of all order
processed through ICS.
<PAGE> 6
ANNEX 2: U.S. PRICE LIST FOR SOFTWARE.NET 4/22/98
<TABLE>
<CAPTION>
<S> <C>
Internet Commerce Services Corporation (ICS)
CommerceFLEX Implementation (SCMP) [*]
Merchant Set-up & Activation (additional TIDs)
Transaction Pricing (see attached for listing of services and exclusions)
Global Rights Registry Services [*]
Intellectual Property Rights Management
Required for all IP Owners utilizing Global Rights Registry Services. Covers
property rights management services for 50 SKU's. Secure, global, rights
registration, property rights protection, record retention (24 months following
date of registration), and quarterly rights reporting. Includes property rights
protection services to prevent unauthorized access; and secure record storage
on redundant servers, geographically located to comply with don protection
regulations. Digital warehousing of associated digital content and maintenance
of SKU archive for 24 months following date of last request is provided at no
additional charge.
Intellectual Property Registration & Preparation [*]
Sm@rtCert
Sm@rtCert Auto-Registration
Registration of one SmartCert SKU, any associated content, and processing for
distribution. IP Owner manages all registration via online form. IP Owner
may modify the SmartCert and associated content within 30 days of initial
registration without additional charge. Changes subsequent to 30 days will be
treated as a new registration. SmartCerts not requiring validation (such as
promotional SmartCerts) are considered final when released for registration;
any modification is considered a new registration.
Fees are billable monthly, based on annual committed registration volume. [*]
ICS Assisted Sm@rtCert Registration [*]
Registration of one SmartCert SKU and any associated content and processing for
distribution. Customer supplies ICS with physical master and graphics. ICS
handles administration. IP Owner may modify the SmartCert and associated content
within 30 days of initial registration without additional charge. Charges
subsequent to 30 days will be treated as a new registration. SmartCerts not
requiring validation (such as promotional SmartCerts) are considered final when
released for registration; any modification is considered a new registration.
Portland Software v1.5 Preparation & Registration [*]
Includes all services necessary to brand the product, conduct QA procedures on
the branding process, and prepare it for distribution. Once tested, the
preparation and registration process is considered complete. Normal turnaround
96 hrs M-F. Guarantee 48 hr delivery M-F, add $200 to packing fee.
Packing Maintenance Services
1 year maintenance for 2 additional re-packs
1 year maintenance for 4 additional re-packs
Preview TimeLOCK v3.0 Preparation & Registration [*]
TimeLOCK 3.0 - Distribution Ready Client Build
This option completely builds and brands a product for distribution. Customer
may purchase the builder tool from Preview or ICS. If customer has already
'built' product, only the registration fee is applies. Optionally, the customer
may have ICS provide the labor to build the product. Guarantee 48hr delivery,
add $350
TimeLOCK 3.0 - Channel Branding [*]
This option brands a product for distribution previously registered by a
publisher with the Global Rights Registry. Customer may purchase the branding
tool from Preview or ICS. Customer may have ICS provide the labor to brand the
product. Guarantee 48hr delivery, add $350.
Rights Revocation Services [*]
Rights Revocation
Includes processing Letters of Destruction (digitally submitted only) and
adjustment of all records to revoke rights in the event of returns or requests
for revocation.
</TABLE>
- --------------------
(c) 1998 ICS Corporation, Prices subject to change without notice.
* Further information on this page has been omitted and filed separately
with the Securities and Exchange Commission.
<PAGE> 7
TRANSACTION SERVICES
ADDENDUM TO SOFTWARE.NET PRICE LIST 4/22/98
<TABLE>
<CAPTION>
<S> <C>
BUNDLED TRANSACTION PRICING
Bundled Transaction Pricing [*]
Risk Management & Distribution Control Services [*]
IVS(TM) Fraud Protection Services
Territory Management
DIGITAL RIGHTS ISSUANCE, VALIDATION, AND DIGITAL DELIVERY SERVICES
SM@RTCERT
Sm@rtCert Issuance and Validation
Fee charged for each valid access request, not to exceed number of rights
issued on certificate. Includes issuance, U.S. Government export compliance and
2 year proof of purchase retention.
Promotional Sm@rtCert Issuance
Issuance of promotional SmartCerts. e.g. those not requiring validation after
issuance.
PORTLAND SOFTWARE v1.5 digital unlock key delivery [*]
includes U.S. Government export compliance and Portland Software unlock key
PREVIEW SOFTWARE v3.01 digital unlock key delivery
includes U.S. Government export compliance, credit card pre-authorization and
settlement, IVS, sales tax calculation, and Preview Software unlock key
SECURE DIGITAL PRODUCT DELIVERY
includes successful download guarantee, 2 year reissue guarantee, U.S.
Government export compliance
COMMERCIAL SERVICES [*]
Tax Calculation
PAYMENT PROCESSING [*]
Credit card pre-authorization
Credit card settlement (bill)
Credit/return
FULFILLMENT MESSAGING
Ship order notification to 3rd party fulfillment house (email)
EDI to trading partners currently established as of 4/1/98
ADDITIONAL SERVICES NOT INCLUDED IN BUNDLED PRICE
CREDIT CARD RETURN [*]
AUTOMATED LICENSE/RIGHTS CANCELLATION
CUSTOM FULFILLMENT MESSAGING
PGP key exchange set-up [*]
EDI or custom message setup
(applies to trading partners not currently supported as of 4/1/98 or used
expressly to support software.net business)
</TABLE>
<PAGE> 8
Amendment No. One to
Internet Commerce Services Agreement
As Between Internet Commerce Services Corporation
And software.net Corporation
Dated April 23, 1998
This Amendment No. One (hereafter "Amendment") to the Internet Commerce
Services Agreement as between Internet Commerce Services Corporation and
software.net Corporation dated April 23, 1998 (the "Services Agreement") is
hereby entered into as between Internet Commerce Services Corporation ("ICS")
and software.net Corporation ("software.net" or "Customer").
WITNESSETH:
WHEREAS the parties did enter into the Services Agreement, which under its
terms was made effective as of April 23, 1998.
WHEREAS the parties now wish to amend the above-mentioned Services
Agreement to include certain mutual intellectual property infringement
indemnification.
WHEREFORE, the parties agree to amend the Services Agreement as follows:
AMENDMENT
1. Intellectual Property Indemnification by software.net. The parties
agree to add the following to the end of section 6(d) of the Services Agreement:
"Notwithstanding any provisions to the contrary in this Agreement,
Customer will defend, at its expense, any claim, suit or action ("Claims
against ICS") brought against ICS resulting from the breach of the
representations and warranties contained in this subsection 6(d), and Customer
further agrees to pay all damages and costs finally awarded against ICS
attributable to any such Claim against ICS and all amounts paid in settlement
of any such Claim against ICS; provided that Customer shall have sole control
of the defense and settlement of any such Claim against ICS, and further
provided that ICS notifies Customer promptly in writing of such Claim against
ICS and gives Customer all authority, information and assistance, at Customer's
expense, reasonably necessary to settle or defend such Claim against ICS.
Customer's indemnification liability under this section 6(d) shall not exceed
$100,000."
<PAGE> 9
2. Intellectual Property Indemnification by ICS. The parties agree to
add a new section 6(e) to the Services Agreement as follows:
"(e) Notwithstanding any provisions to the contrary in this
Agreement, ICS will defend, at its expense, any claim, suit or action ("Claim
against Customer") brought against Customer based upon an allegation that the
Services or the use of any software provided by ICS in connection with the
Services infringe any patent, copyright, trademark, trade secret or other
intellectual property right of any third party, and ICS further agrees to pay
all damages and costs finally awarded against Customer attributable to any such
Claim against Customer and all amounts paid in settlement of any such Claim
against Customer; provided that ICS shall have sole control of the defense and
settlement of any such Claim against Customer, and further provided that
Customer notifies ICS promptly in writing of such Claim against Customer and
gives ICS all authority, information and assistance, at ICS's expense,
reasonably necessary to settle or defend such Claim against Customer. ICS's
indemnification liability under this section 6(e) shall not exceed $100,000."
3. The parties further agree that the effective date of the Services
Agreement shall be as of December 31, 1997.
4. Except as expressly set forth herein, all other terms of the Services
Agreement shall remain in full force and effect.
5. This Amendment may be executed in counterparts, each of which shall
be deemed an original, but all of which shall constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered by their duly authorized representatives.
Date: May 20, 1998 Internet Commerce Services Corporation
By: /s/ [ILLEGIBLE]
------------------------------------
Its: EXECUTIVE VICE PRESIDENT
------------------------------------
Date: May 20, 1998 software.net Corporation
By: /s/ [ILLEGIBLE]
------------------------------------
Its: VICE PRESIDENT, BUSINESS OPERATIONS
------------------------------------
2
<PAGE> 10
Amendment No. Two to
Internet Commerce Services Agreement
As Between Internet Commerce Services Corporation
And software.net Corporation
Dated April 23, 1998
This Amendment No. Two (hereafter "Amendment") to the Internet Commerce
Services Agreement as between Internet Commerce Services Corporation and
software.net Corporation dated April 23, 1998 (the "Services Agreement") is
hereby entered into as between Internet Commerce Services Corporation ("ICS")
and software.net Corporation ("software.net" or "Customer").
WITNESSETH:
WHEREAS the parties did enter into the Services Agreement, which under its
terms was made effective as of April 23, 1998.
WHEREAS the parties did enter into Amendment No. 1 to amend the
above-mentioned Services Agreement to include certain mutual intellectual
property infringement indemnifications and to make the Services Agreement
effective as of December 31, 1997.
WHEREAS the parties desire to clarify the Amendment No. 1 to indicate that
the parties agreed that the commencement date for the initial one-year term of
the Services Agreement shall be the same as the effective date of the Services
Agreement, that is, December 31, 1997.
WHEREFORE, the parties agree to amend the Services Agreement as follows:
AMENDMENT
1. Notwithstanding any provisions to the contrary in the Services
Agreement and amendments thereof, the parties agree that the commencement date
for the initial one-year term of the Services Agreement and the effective date
of the Services Agreement shall be December 31, 1997.
2. Except as expressly set forth herein, all other terms of the Services
Agreement and amendments thereof shall remain in full force and effect.
3. This Amendment may be executed in counterparts, each of which shall be
deemed an original, but all of which shall constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized representatives.
Date: May 21, 1998 Internet Commerce Services Corporation
By: /s/ SIGNATURE
-----------------------------------
Its: Executive Vice President
-----------------------------------
Date: May 21, 1998 software.net Corporation
By: /s/ SIGNATURE
-----------------------------------
Its: Vice President, Business Operations
-----------------------------------
